Better every day
Sustainability Report 2019
This Sustainability Report is printed on 100% recycled paper from a sustainable source. About this report
It contains insights into Almarai’s sustainability-related Welcome to our third programs, achievements and performance, complementing the information provided in our Annual Report 2019. annual sustainability report.
This Sustainability Report Scope This report covers our operations as Almarai Company. represents a comprehensive This includes our operations in the GCC (Gulf Cooperation overview of our commitments Council), which includes Saudi Arabia, United Arab Emirates, Oman, Bahrain and Kuwait (referred to as ‘Almarai’) and our and progress towards operations in Egypt (Beyti) and Jordan (Teeba) under our joint venture International Dairy and Juice (IDJ), and in Argentina improving our environmental, and the USA as Fondomonte (defined for the purposes of this report as the ‘Subsidiaries’). This report does not cover social and economic impacts. Almarai’s operations as Premier Foods, Pure Breeds, and co-manufacturing. To the extent possible, considering data limitations, and the boundaries outlined above, this report covers all main operational and corporate functions, unless otherwise stated.
Reporting guidelines This report has been prepared in accordance with the Cautionary statement Global Reporting Initiative (GRI) Standards: Core option. This report contains certain forward-looking statements that For further information and the GRI Content Index, express the way in which Almarai and its Subsidiaries intend please see Appendices A-D. to conduct its activities. These statements typically contain words such as “anticipate,” “believe,” “expect,” “estimate,” Where relevant, we also show our contribution to the “forecast,” “intend,” “plan,” “project” or similar expressions. National Transformation Program (NTP) of Saudi Arabia’s Such statements are based on assumptions made using Vision 2030 and the Sustainable Development Goals (SDGs) currently available information that is subject to a range in Appendices F and G. of uncertainties that could cause actual results to differ from these projected or implied statements. Any forward- looking statements contained in this report are therefore not Reporting period promises or guarantees of future conduct or policy, and thus This report covers the period from 1 January 2019 to Almarai and its Subsidiaries assume no obligation to publicly 31 December 2019, unless otherwise indicated. update any statements made in this report. Almarai and its Subsidiaries rely on information obtained from sources believed to be reliable but does not guarantee its accuracy Feedback or completeness. For questions or comments regarding this report and sustainability at Almarai, please contact us at: [email protected].
2 Almarai Sustainability Report 2019 Contents
Message from the Chairman 4
Message from the Chief Executive Officer 6
2019 at a Glance 8
About Almarai 10
Our value chain - Quality you can trust 12
Sustainability management at Almarai 14
Caring for people 20
Protecting the planet 32
Producing responsible products 44
Our subsidiaries 51
Appendices / GRI content index 56
www.almarai.com 3 Message from the Chairman
Message from the Chairman
On behalf of the Board of Directors, I am delighted to introduce our 2019 Sustainability Report.
4 Almarai Sustainability Report 2019 Over the past year we have focused on becoming a more Our sustainability strategy will help us to drive better practices dynamic Company to overcome challenges and seize in our own operations and strengthen our relationships with opportunities available to us in an economically challenging stakeholders, whether they be local, regional or global. We environment. We understand that operating in a changing have considered how our sustainability strategy aligns with environment requires agility and novel approaches to the the sustainable development objectives of the Saudi National way we do business. We believe that an intensified focus Vision 2030, as well as the global Sustainable Development on sustainability complements our corporate strategy, Goals. Moreover, the launch of our sustainability strategy in contributing to our dynamism and resilience, by recognizing 2020 comes at an exciting time when several initiatives are and responding to the environmental, social and economic being launched within the Kingdom for the G20 summit. factors that impact both our business and stakeholders. It is our hope that Almarai inspires our peers to raise the In 2019, we continued to build on the firm foundations we have bar, not only within the Food & Beverage sector, but the put in place to more strategically manage sustainability and wider economy, to create shared valued through effective drive tangible and impactful change. We have refocused sustainability management. our approach to highlight how action on sustainability can unlock our potential to create shared value, developing 25 Through our sustainability reporting we offer our stakeholders sustainability targets to achieve by 2025. insights into how we are using sustainable thinking to challenge and improve our practices every day. At Almarai, As the Middle East’s largest food and beverage manufacturer we realize that the prosperity of future generations depends and distributer, and the world’s largest vertically integrated on our actions today, and we are working towards positive dairy company, we play an important role in shaping the change that can support a better tomorrow. market for the better. Our sustainability strategy, ‘Better every day’ is our answer to this call. By reporting our progress against our targets from 2020, we are taking a significant step forward in our ongoing journey to embed a sustainable mindset within our business.
Sultan bin Mohammed bin Saud Al Kabeer Chairman of the Board
www.almarai.com 5 Message from the Chief Executive Officer
Message from the Chief Executive Officer
It is with great pleasure as Almarai’s CEO to have the chance to present our third annual sustainability report, providing us with the opportunity to inform our stakeholders about our sustainability journey and performance.
6 Almarai Sustainability Report 2019 Our focus on building a more dynamic future over the past We have also worked to remove nearly 3,000 tons of plastic year falls squarely in line with our maturing approach to packaging from our products. Packaging innovation continues coherently manage sustainability within our business. We to remain a focus area as we strive to reduce our contribution acknowledge that our long-term growth prospects and to the consumer waste stream. This aim is leading us to ability to create shared value are integral to how we actively support work to transform the packaging economy in the manage our environmental, social, and economic impacts. Kingdom to deliver viable waste management solutions. A sustainability mindset only adds to our dynamism as it supports innovation and resilience, it simply makes good Supporting the health and wellbeing of our employees business sense. is not only the right thing to do, it also supports business performance. We began to roll-out our occupational health In 2019, we solidified our belief that the world can be a program during 2019. Our mobile health unit has screened better place if we are all committed to doing better every over 500 people during the year, identifying health conditions day, through the development of our sustainability strategy which through early detection, has helped raise awareness of for 2025, ‘Better every day.’ Our new strategy outlines our potentially harmful illnesses and conditions. commitments and targets for sustainability that will drive improvements within our business in the years ahead. While I invite you to read through this report which provides a the strategy officially launches in 2020, we continued to comprehensive overview of our approach to sustainability, implement initiatives throughout the year that have helped us covering the issues that matter most to us, and the efforts we to make positive changes. are making to embed sustainability management throughout our business. In 2019, we completed the installation of the largest private solar energy project in the Kingdom. By the end of 2020, I would like to thank the management for their support, and through the commitments we have made to developing a I look forward to working with our stakeholders to develop a clean energy portfolio, we expect that approximately 10% deeper level of engagement to help meet their expectations of our total electricity consumption in the Kingdom will be in the coming year. By working in partnership and addressing derived from renewable sources as more solar projects the issues that are most important to our stakeholders and become operational. our business, we can continue to contribute to a sustainable future. In addition to clean energy, we are working to improve energy efficiency. In 2019, we completed Phase 1 of our LED lighting upgrade, contributing to an estimated load reduction of up to 70%. Following the completion of Phase 2, in the coming year, some 70,000 lights across our facilities will have been replaced with LED technology.
Majed Nofal Chief Executive Officer
www.almarai.com 7 2019 at a Glance
2019 at a glance Beyond profitable growth, Almarai wants to ensure it makes a positive contribution to society and minimize its impact on the environment. In 2019, we continued to make progress every day towards becoming a more sustainable company.
8 Almarai Sustainability Report 2019 2019 King Khalid Award 2000 Global Best Regarded for Sustainability Companies Best Performer in Innovating Social Development Solutions
1.6 50%+ Nearly 3,850
Percentage point decrease Increase in total hours of Metric tons of packaging in employee absenteeism employee training removed from the consumer waste stream
19.6 20% 20%+ GWh
Increase in Increase in the number of Increase in food waste renewable energy participants in our Almarai site diverted from landfill visit education program
www.almarai.com 9 About Almarai
About Almarai
Almarai Company is a Saudi publicly traded joint-stock company listed on Tadawul, the Saudi Stock Exchange.
Founded in 1977, Almarai Company has grown to become the Saudi Arabia and Jordan, we also have arable farms primarily Middle East’s largest food and beverage manufacturer and located in Argentina and the United States of America. distributor, and the world’s largest vertically integrated dairy Through our direct control of the supply chain, we have the company. With headquarters in Riyadh, Saudi Arabia, our unique ability to deliver safe, quality products to millions of production and distribution footprint covers the GCC states, consumers every day. Egypt and Jordan. In addition to our farming operations in
To be the consumers’ preferred To provide quality and choice by leading in chosen nutritious food and beverages markets with superior food and that enrich consumers’ lives beverage products. every day. Vision Mission
Adaptable Sharing Passionate Innovative Respect Excellence Values
10 Almarai Sustainability Report 2019 Dairy is the cornerstone of Almarai’s range, including Dairy Fresh Dairy, Long Life Dairy and Dairy Foods. We have earned the trust of our consumers for more than 40 years and are the regional market leader in a wide range of sub-categories. New product launches in 2019 included Mango-flavored set yoghurt, Blueberry-flavored Greek yoghurt, Date-flavored milk, and 2.2l fresh milk bottles. We have also implemented a facelift of our butter packaging and expanded the range of food service products.
Juice Almarai is the GCC leader in fresh juice, offering consumers a range of juices, nectars and drinks, as well as products for children. Over the last year, Almarai has been expanding its footprint into other areas of the juice market including premium not-from-concentrate juice, super fruit and everyday segment carton juices with the Joosy Life product range.
Bakery We deliver a wide range of bakery products to consumers across the GCC, marketed under the L’usine and 7Days brands. From bread and snacks to cupcakes, Almarai provides consumers with exciting and innovative treats. In 2019, we launched Coconut Swiss Roll, Red Velvet Muffin, Bran Cream Cheese Sandwich, and Zatar Cream Cheese Sandwich.
Poultry Alyoum is regarded by the market as synonymous with quality and innovation – that’s why it is the brand of choice for over 35.0% of Saudi Arabia’s fresh poultry consumers. The product range includes a comprehensive selection of whole, part and value-added stock-keeping units under the Alyoum and Albashayer brands. In 2019, two versions of our new Oven Ready Chicken product were launched on a test-market basis.
Infant Nutrition Almarai’s Infant Nutrition products are available across Saudi Arabia and other markets in the Middle East and Asia. Our brands include Nuralac and other brands in export markets.
www.almarai.com 11 Our Value Chain
Our value chain Quality you can trust
Procurement Farming Manufacturing
Percentage of locally based suppliers across our countries of operation: Over 51% 191 GCC million chickens 13 were raised on our farms in Saudi Arabia. manufacturing facilities 69% in total across Saudi Arabia, Egypt Jordan and Egypt produce and package our wide range of products. 97% 183,345 Jordan cows are cared for on our farms Dairy Juice in Saudi Arabia and Jordan. 73% United States Bakery Poultry
99% 32,367 Infant Nutrition Argentina hectares
of land under production in Argentina and USA to grow feed for our cows.
12 Almarai Sustainability Report 2019 Sales, distribution & logistics Consumers Our people
Almarai has over Almarai has
All our achievements 1,800 800+ are made possible by vehicles products the commitment of our on the roads at any given time. which are sold to over 42,382 employees across our global operations. From our manufacturing facilities, our products are transported to 83 depots in countries 5 across the GCC. 62,500 customers in countries 5 across the GCC.
www.almarai.com 13 Sustainability Management at Almarai
As the region’s largest food and beverage company, Almarai plays an important social, environmental and economic role locally, regionally and globally.
14 Almarai Sustainability Report 2019 Sustainability management at Almarai
Through the integrated management of our economic, environmental and social performance, we aim to maximize the shared value we create for our stakeholders, now and in the future. We continue to implement industry- leading practices to protect the wellbeing of our consumers and employees, ensure the health of our farm animals, protect the natural environment and generate significant economic value.
www.almarai.com 15 Sustainability Management at Almarai
Our sustainability strategy
In 2019, we developed a set of 25 goals and targets to achieve by 2025 during the development of our sustainability strategy, Better every day. Our strategy is built upon three interconnected pillars and 12 material issues that are essential in supporting our contribution to building a more sustainable future.
Better every day Almarai® believes the world can be a better place if we are all committed to doing better every day. By living up to our commitments, we can make positive changes that support a better tomorrow.
Caring Protecting Producing for people the planet responsible products
Nutrition and wellbeing Water management Quality and food safety We are working to make sure that We are working to make sure We are working to make sure our our products and communications we are effectively using water products are safe and satisfy support healthy living every day. resources every day. consumers’ needs every day.
Health and safety Packaging innovation Animal welfare We are working to make sure we We are working to make sure We are working to make sure that foster a health and safety culture we reduce the impact of our our animals are treated and among our people every day. packaging on the environment handled humanely throughout every day. their lifecycle every day. Employee talent and diversity We are working to make sure that Climate change Ethical sourcing our people are developed, valued We are working to make sure We are working to make sure we and included every day. we implement more sustainable take a collaborative approach to solutions to reduce our emissions elevate sustainability in our supply Community investment every day. chain every day. We are working to make sure that we are leveraging our resources to Waste management create a positive impact every day. We are working to make sure that we are moving towards zero to landfill every day.
Sustainable agriculture We are working to make sure that our agricultural practices are regenerative every day.
For more detailed information about our materiality analysis process, please see Appendix A.
16 Almarai Sustainability Report 2019 Our belief that the world can be a better place if we are all committed to doing better every day is at the heart of what sustainability means to Almarai. Our strategy is founded on this belief and from 2020 we will report against our strategic sustainability goals and targets.
Our strategic goals and targets
Caring for people
• Develop and implement a holistic plan to further enhance our nutrition and wellbeing offering Nutrition and wellbeing by 2025 • Achieve ISO 45001 compliance for all our divisions by 2025 Health and safety • Institute an occupational health and wellbeing program accessible to all employees by 2025 • Increase the number of female employees in our workforce year-on-year Employee talent • Reduce voluntary employee turnover to achieve an average of 12% over the period 2020-2024 and diversity • 90% of managers engage in at least 40 hours of professional development per year by 2025 Community investment • Donate 2.5 million healthy servings by 2025 • Educate 250,000 people through our site visit program by 2025 • Improve the employability of at least 1,400 young people through the Dairy and Food Polytechnic (DFP) program by 2025
Protecting the planet
Water management • Increase water efficiency across our Manufacturing, Sales, Distribution and Logistics Divisions by 15% by 2025 (against a 2018 intensity baseline) • Initiate and support collaborative efforts with stakeholders to address water risk and enhance conservation by 2025 Packaging innovation • Avoid the use of 9,000 metric tons of plastics from entering the consumer waste stream by 2025 (against a 2015 baseline) • Actively support the transformation of the packaging economy in KSA by 2025 Climate change Transport and refrigeration • Explore and trial alternative fuel vehicles for our sales transport fleet on an ongoing basis • Increase the fuel efficiency of our sales, distribution and logistics vehicles by 10% by 2025 (against a 2018 baseline) • 100% of our sales depot cold stores will be CFC free by 2025 Energy • Reduce energy consumption across our Manufacturing, Sales, Distribution and Logistics Divisions by 15% from efficiency measures by 2025 (against a 2018 intensity baseline) • Increase the share of electricity from clean energy sources across our Administration, Manufacturing, Sales, Distribution and Logistics Divisions to 20% by 2025 • Achieve ISO 50001 certification for our Administration, Manufacturing, Sales, Distribution and Logistics Divisions by 2025
Waste management • Reduce waste going to landfill across all our divisions by 50% by 2025 (against a 2018 baseline)
Sustainable agriculture • Enhance sustainable practices on our arable farms by 2025
Producing responsible products
• All manufacturing sites will be Global Food Safety Initiative (GFSI) certified by 2025 Quality and food safety • All high-risk ingredient suppliers will be Global Food Safety Initiative (GFSI) certified by 2025
Animal welfare • Achieve global animal welfare certification for our dairy and poultry farming operations by 2025
Ethical sourcing • Put an ethical sourcing process and audit plan in place by 2025
For more detailed information about the boundaries of our strategy, please see Appendix E.
www.almarai.com 17 Sustainability Management at Almarai
Sustainability governance
Our Vice President of Quality, Regulatory, Health, Safety, Security & Sustainability reports directly to our Chief Executive Officer (CEO) and Executive Management on sustainability during bi-monthly management meetings, while our Head of Sustainability plays a coordinating role to ensure progress against our strategic goals and targets.
Our Environmental Policy
As Almarai is committed to minimizing its impact on • Encourage our suppliers and contractors to be the environment and to continual improvement of its environmentally responsible; environmental performance, we have an environmental • Identify and implement opportunities for environmental policy which applies to all Almarai business units and sustainability.” facilities, inclusive of co-manufacturers and joint-venture partners. The Almarai Environmental Policy is endorsed by Almarai’s CEO. “To minimize environmental impacts, we shall: • Comply with applicable legal requirements; Our Sales, Distribution and Logistics and Farming • Minimize pollution, waste and consumption of Divisions, and our Poultry Processing Plant hold resources; International Organization for Standardization (ISO) 14001 • Educate, train and motivate all employees to carry out Environmental Management System certification. tasks in an environmentally responsible manner;
Our performance summary 2018 2019
Number of incidents of non-compliance with environmental laws and regulations (GGC only) 0 0
18 Almarai Sustainability Report 2019 Stakeholder engagement
At Almarai, we understand that balancing the needs and expectations of our stakeholders is essential to delivering on our commitments and maximizing shared value creation. We engage in regular dialogue with our stakeholders (our consumers, shareholders/investors, employees, government regulatory bodies, and civil society organizations), through various communication channels to ensure we consider and respond to their needs and expectations, on the issues that matter to each of our key stakeholder groups.
For more information about our stakeholder engagement, please see Appendix B.
Alignment and contribution to national and international frameworks
Saudi Arabia’s Vision 2030 and National Transformation development. Based on our sustainability framework, we have Program (NTP) provide a clear roadmap for Saudi Arabia’s mapped out areas of alignment with national and international future, guiding economic, social and environmental sustainable development objectives. Appendix F identifies development over the coming decade; while the Sustainable the NTP targets and appendix G identifies the SDG targets Development Goals (SDGs) provide governments and that align with our sustainability framework. businesses with a framework to achieve sustainable
National Transformation Program 2020
www.almarai.com 19 Caring for People
Our promise to improve the lives of those that are integral to our business success every day.
20 Almarai Sustainability Report 2019 Caring for people
Nutrition and wellbeing We are working to make sure that our products and communications support healthy living every day.
Health and safety
We are working to make sure we foster a health and safety culture among our people every day.
Employee talent and diversity
We are working to make sure that our people are developed, valued and included every day.
Community investment
We are working to make sure that we are leveraging our resources to create a positive impact every day.
www.almarai.com 21 Caring for People
Our strategic goals and targets
To support our commitments towards ‘Caring for people’ and enhance our accountability, we have identified the following goals and targets.
Nutrition and wellbeing • Develop and implement a holistic plan to further enhance our nutrition and wellbeing offering by 2025
Health and safety • Achieve ISO 45001 compliance for all our divisions by 2025 • Institute an occupational health and wellbeing program accessible to all employees by 2025
Employee talent • Increase the number of female employees in our workforce year-on-year and diversity • Reduce voluntary employee turnover to achieve an average of 12% over the period 2020-2024 • 90% of managers engage in at least 40 hours of professional development per year by 2025
Community investment • Donate 2.5 million healthy servings by 2025 • Educate 250,000 people through our site visit program by 2025 • Improve the employability of at least 1,400 young people through the Dairy and Food Polytechnic (DFP) program by 2025
22 Almarai Sustainability Report 2019 Nutrition and wellbeing We are working to make sure that our products and As part of our mission of providing quality and nutritious food and beverages that enrich consumers’ lives every communications support day, we have been supportive of growing consumers’ healthy living every day. demands for more healthful and nutritious products. We are constantly investing in and developing new technologies and competencies to improve the health and nutritional profile of our products, and we are incorporating health and nutrition specific criteria into product innovation and development. Almarai remains committed to We strongly believe that our marketing plays an integral role public education for consumers and in our ability to support healthy consumer lifestyles and it healthcare professionals should be governed by the highest ethics and responsibility. It is important to us that our marketing practices promote our In collaboration with various organizations, Almarai products responsibly, which is why we strive to be transparent has supported health and nutritional awareness in with our consumers by offering choice, providing credible and Saudi Arabia. In 2019, we engaged in the following clear communications, and labeling to empower consumer projects: purchasing decisions. We seek to market not only the taste of a product or brand, but also the health and nutritional • Supported a health week program with the value, quality and safety. As per Saudi law, all our products Royal Saudi Air Force are labeled with nutritional information, including information • Supported a symposium on Osteoporosis at the on sodium and safe storage. Labeling now also includes University of King Abdulaziz additional information such as the serving size and number of • Supported a health assembly event promoting servings per item. exercise and health awareness with the Ministry of Health Empowering our consumers to make better-informed choices • Supported a marathon for diabetics carried out regarding the nutritional value of our products is further at King Saud University supported through our efforts to build health and nutrition • Collaborated with Princess Nora Bint Abdul awareness. We have multiple communication platforms that Rahman University on workshops raising health include health and nutritional education. We work closely awareness among students and practical learning with the healthcare community, and key pediatric and clinical on product formulation nutritional medicine opinion leaders. We participated in a • Supported a dental care campaign number of scientific conferences and sponsored an online educational program for healthcare professionals, as well as other continuing education events for frontline health workers during the past year.
In 2019, we continued to focus on product reformulation by eliminating added sugar in juices and salt reduction in baked goods and other foods. Over half of our bakery product range now has reduced salt and all our fresh juices in select markets contain zero added sugar. We also launched new product Almarai Almarai lines, such as our low fat, protein rich Greek Style Yoghurt, products contain products contain and our high in fiber Bran Bread. In line with Almarai’s no artificial no trans strategic sustainability goals, we will commence work in 2020 colors. fats. on developing a holistic plan to further enhance Almarai’s nutrition and wellbeing offering by 2025.
www.almarai.com 23 Caring for People
Almarai remains committed to breastfeeding
Almarai supports breast milk as the unique and best At Almarai, all commercial practices are guided and fully in nutrition for babies, by promoting exclusive breastfeeding compliance with the World Health Organization code, as during the first year of life. Breast milk is the gold standard well as regulated by the rules of the Saudi Breastfeeding and the only milk that provides babies with the most Law. Promoting healthy habits and best nutrition for moms complete nutrition. It also strengthens the bond between and babies, including breastfeeding, is at the core of mother and child with numerous benefits for both. Almarai Infant Nutrition principles.
Our performance summary 2018 2019
Number of incidents of non-compliance concerning product information and labeling 0 1
Number of incidents of non-compliance with regulations and/or voluntary codes concerning 0 0 marketing communications Percentage of significant product categories covered by and assessed for compliance with 100% 100% product information and labeling procedures (%)
Health and safety We are working to make sure we foster a health and Our greatest asset is our employees, their health and safety is extremely important to us at Almarai. We protect our safety culture among our employees by applying international occupational health and safety standards, introducing policies to stimulate employee people every day. engagement, providing training and awareness, and encouraging communication between employees at all levels. Employee engagement is another dimension of our approach In 2019, our incident reporting system became fully to improving both the health of our employees and preventing operational. Accessible to all employees, this tool has occupational accidents before they occur. We have taken improved our ability to track and analyze Health, Safety and a conscious decision to proactively support our people’s Security (HSS) incidents and risks, which in turn will enable wellbeing through earlier detection of health conditions. us to more effectively prevent incidents from occurring in the In 2019, we commenced screening employees at our main future. As a result, near miss reporting has increased by over manufacturing site in KSA using our occupational mobile 250% against 2018 levels. In addition, 80% of our sales van health unit and were able to reach over 500 people within fleet has been fitted with speed restrictors as part of our road the first three months. While we are still in the initial roll-out risk strategy. As part of this strategy, behavioral training and phase, we are already seeing the benefits of this new program road safety campaigns are conducted, which has helped to in detecting employee health conditions. For example, reduce our vehicle collision frequency by 30% against 2018 amongst those screened, we have detected 6% with early levels. In 2019, the employee lost-time injury rate increased onset diabetes and 14% as pre-diabetic. Employees identified by nearly 9%, which is attributed to a combination of reduced with abnormal results were advised to consult a physician. man-hours worked and the increased utilization of the The mobile health unit forms an integral part of reaching our incident reporting system. In addition to continued training on strategic sustainability goal to institute an occupational health appropriate incident reporting, we expect that our health and and wellbeing program accessible to all employees by 2025. safety strategy and supporting programs will help to reduce During the coming year, we are aiming to reach all employees our incident rate in the coming years. at our main manufacturing site in KSA.
24 Almarai Sustainability Report 2019 In 2020, several digitalization projects are planned, including the management of hot works permits and the development of a health and safety dashboard for managers to analyze their safety performance. We are also planning to migrate our incident reporting system on to the cloud, which will provide access to anyone with a smart phone. These changes will further enhance our ability to create pre-emptive solutions to our health and safety challenges.
Our Health and Safety Policy Achieving Occupational Health and Safety Management System ISO 45001:2018 compliance We have a two-level health and safety policy. Level one operates at the corporate level, from which individual divisions and business units develop their In line with our strategic sustainability goals, we are own distinct level two policies, tailored to reflect their working towards achieving ISO 45001 compliance hazard profile and management structure. for all our divisions by 2025. During 2018 our Farming Division achieved certification and our Sales, The corporate level one policy includes the Almarai Distribution and Logistics (SDL) Division certified 30% “Safe Person, Place and Practice Strategy” which of its sites. In 2019, Farming successfully completed define our approach to the safe management of assets a surveillance audit and SDL certified an additional and people. This strategy seeks to drive 1. safety 30% of its sites in addition to successfully completing performance, 2. leadership visibility and accountability, a surveillance audit of the sites certified during 2018. 3. continuous safety culture improvement and 4. In 2020, we will continue to work towards achieving ensure resources are in place for all sites to improve ISO 45001 compliance across our manufacturing and safety performance. Taking our commitment one step poultry divisions. further, we have a group HSS forum which drives our focus on HSS across the business and who’s role is to develop HSS strategy, performance, standards and guidelines.
Our performance summary 2018 2019 Number of employee lost-time injuries 256 195 Employee lost-time injury rate (per 1 million man-hours) 1.72 1.87 Number of contractor lost-time injuries NIA NIA Contractor lost-time injury rate (per 1 million man-hours) NIA NIA Hours of employee HSS training 155,320 352,338 Average hours of HSS training per employee 4.0 9.7 Hours of contractor HSS training NIA 1,289 Average hours of HSS training per contractor NIA 2.1 Employee absenteeism rate (%) 6.5% 4.9%
Note: NIA stands for no information available; average hours of training per worker type are based on average headcount.
www.almarai.com 25 Caring for People
Employee talent We are working to make and diversity sure that our people are developed, valued and At Almarai, we recognize that we are only as strong as our employees, and we are committed to attracting, developing, included every day. and retaining a motivated and diverse workforce.
To ensure our employees have the required knowledge Our efforts to offer equal opportunities also extend to those and skills to perform their roles effectively, Almarai has a with disabilities. To this end, Almarai was the first company comprehensive training policy that covers all aspects of in Saudi Arabia to obtain a “Moaamah” certificate, which training. Our Training Policy addresses all key elements in an certifies that we have met the infrastructure requirement annual training cycle, including training needs assessment, standards to accommodate people with disabilities in the training plan, training delivery, training evaluation, and work environment. We employed more than 430 people with a new employee induction. It also addresses education disability during this past year. assistance for employees, study leave, summer and co-op trainee programs.
Established in 2014, the Almarai Academy focuses on In 2019, we have leadership development for all management levels. Almarai Academy collaborates with local and global providers to increased deliver the best in class leadership development programs for the number its employees. of e-learning
Our comprehensive Talent Management Process (Project users by 25%. Horizon), enables Almarai to understand its talent portfolio, and build a pool of successors for our future business opportunities and challenges. Using leadership potential psychometrics assessments, Talking Talents discussions and calibration sessions, Almarai can target specific and tailored training needs for its people talent.
In 2019, we reviewed and adjusted all our leadership programs to ensure alignment with our corporate strategy for 2025. We also increased the number of Almarai Academy cohorts, introduced a new program for specialist grades, and finalized the design of a program for junior management which will begin in 2020. With these changes we have expanded our leadership program offering for all our management grades. As part of our strategic sustainability goals, we have set a target that 90% of managers engage in at least 40 hours of professional development per year by 2025. To support this target, we have identified initiatives to increase the uptake of additional professional development opportunities from 2020 onwards.
Almarai also aims to provide an inclusive work environment for all and we are making strides towards this end. We seek to provide career opportunities for women in the markets where we operate, and we employed more females in 2019 than the previous year. From 2020 as part of our strategic sustainability goals, we have set a target to increase the number of female employees in our workforce year-on-year.
26 Almarai Sustainability Report 2019 Keeping employees engaged, motivated, and satisfied
Almarai provides a wide range of activities that seek to • Employee satisfaction and engagement surveys create a flexible work culture that encourages productive, • E-connect, a mobile app to receive company news healthy work/life balance, employee retention, and updates and special employee discounts and offers personal and professional growth opportunities, including: • Opportunities to support society through blood donation events and micro home-based business • Recognition and rewards, such as the Annual in collaboration with the Saudi Human Resources Service award Development Fund • Special day celebrations, such as National Day • Recreational facilities e.g. facilities for sport and • Social outings and trips relaxation at our plants • Health and wellbeing opportunities through discounted gym membership and other in-house events We will be identifying additional opportunities to • Training and e-learning opportunities further engage our employees to achieve our strategic • Leadership opportunities, such as our Future Leaders sustainability goal to reduce voluntary employee turnover program to achieve an average of 12% over the period 2020-2024.
Developing local leaders
At Almarai, we are committed to prioritizing the including the Almarai Future Leaders program, the development of local leadership. We are proud of our Graduate Professional Trainee program and the Dairy & status of Platinum level for Saudization in the Nitaqat Food Polytechnic (please see page 29 for DFP overview). Program, which aims to Saudize jobs in the Saudi private sector, with 26% of our Saudi Arabia employees being In the broader sense, our commitment to local leadership Saudi nationals. In middle and senior management roles, development focuses on supporting education and Saudization is at 24% and 17% in 2019, respectively. excellence through initiatives such as the Almarai Award for Scientific Innovation, the Almarai Education Excellence Our dedication to our local employees does not end Award for Arab students in the GCC, and the Almarai with their employment. We run several leadership and Award for Veterinary Excellence. professional development initiatives for Saudi employees,
Our performance summary 2018 2019 Number of Saudi employees 8,766 8,466 Percentage Saudization among total workforce (%) 26% 26% Percentage Saudization of middle management (%) 25% 24% Percentage Saudization of senior management (%) 16% 17% Number of female Saudi employees 645 635 Number of Saudi Almarai Academy participants 291 265 Number of Saudi Graduate Professional Trainee participants 22 23 Number of Saudi Almarai Future Leaders participants 21 0 Number of Saudi Dairy & Food Polytechnic participants 584 400 Number of Saudi Almarai Driving School participants 126 133 Total number of Saudi nationals in professional development programs 1,044 821
www.almarai.com 27 Caring for People
Our performance summary 2018 2019 Number of employees 38,416 37,231 Female employees 750 769 2.0% 2.1%
Women in middle management 45 31 3.5% 2.4%
Women in senior management 2 2 0.8% 0.8% Women in non-management positions 703 736 1.9% 2.1% Board seats occupied by women 0 0 0% 0% Number of employees with a disability 468 436 Number of formal incidents of discrimination reported 0 0 Total voluntary turnover 4,360 3,999 11.3% 10.7% Total hours of training provided 375,258 579,152 Average hours of training per employee 9.8 15.6 Number of Almarai Academy participants (National and non-national) 520 565 Number of Almarai Driving School participants (National and non-national) 413 1,384
28 Almarai Sustainability Report 2019 Community investment We are working to make sure that we are leveraging our Almarai continues to strive to support its communities wherever possible. Through education, training and resources to create a positive development, charitable donation, and other programs, impact every day. we provide a greater positive impact for society. Whether in collaboration with organizations or direct engagement, Almarai is actively supporting various causes throughout the year. qualified people with dairy and food industry specific skills. In line with our strategic sustainability goals, we have set a In 2019, Almarai continued its food distribution and nutritional target to improve the employability of at least 1,400 young awareness program for schools in Saudi Arabia, providing people through the DFP program by 2025. over 1,000 schools with more than 880,000 nutritious snacks for the children. Our employee driven food basket donation Our manufacturing facilities are regularly opened to the program was also successful and we reached 1,800 lower public for visits. Tours of our facilities offer an important income families this past year. In line with our strategic opportunity to show case our facilities, engage directly with sustainability goals, we have set a target to donate 2.5 million our consumers and educate them about our company and healthy servings by 2025. our production processes. We invite schools, families and interested individuals to visit our factories, and we even offer We also support robust technical and vocational educational free bus services, as well as lunch to our guests. In 2019, we training (TVET) programs, such as the Dairy and Food hosted more than 88,000 visitors, 15,000 more than 2018. Polytechnic (DFP). This is a joint project between Almarai In line with our strategic sustainability goals, we have set a and the Technical and Vocational Training Corporation target to educate 250,000 people though our site visit program which commenced in 2011. DFP was established with the aim by 2025. of developing young Saudi Nationals skills with a focus on the dairy and food Industry. As one of the major industries in In 2020, we will be working on developing our community Saudi Arabia, the project takes high school graduates and investment strategy in support of our strategic provides training to meet business demand for technically sustainability goals.
Awarding those that are making a difference
As a socially responsible business, we support several • Almarai Veterinarian Award – Launched in 2010, the awards in partnership with other organizations to reward award supports the veterinary profession and aims at achievement in society. These include: reinforcing the importance of the veterinarian’s role in protecting the general health of the GCC’s livestock • Almarai Scientific Innovation Award - The award which is so crucial to supporting food security. We work was launched in 2001 in collaboration with the King in collaboration with the Saudi Veterinary Medical Abdulaziz City for Science and Technology, and aims Society and King Faisal University. to strengthen scientific capability through supporting scientists and researchers in the fields of fundamental • Almarai Award for Ideal Mother - Almarai launched science, applied and developmental sciences, and this award in 2017 in partnership with the Disabled innovation in Saudi Arabia. Children’s Association. It aims to honor mothers who support their children with disabilities in the process of • Almarai Academic Excellence Award – Launched in treatment, education and rehabilitation. In its first year, 2006, it provides support to students who are enrolled five women won the award, and in its second year, 10 in the public education system in GCC countries. women won the award. The award aims to encourage outstanding students, developing their abilities and talent, and supporting their • Photography Award – Launched in 2013, partnering achievements. with National Geographic Abu Dhabi, this award encourages Arab photographic talent to expand their creative capabilities. Since launch more than 160,000 participants have engaged in the competition.
www.almarai.com 29 Caring for People
Our performance summary 2018 2019 Total CSR spending (SAR million) 39.6 34.7 Total CSR spending as a percentage of net profit (%) 2.0% 1.9% Product donations Number of schools provided with snacks for students 947 1,036 Snacks for school children (Number of servings) 853,242 880,228 Number of low-income families provided with food baskets 600 1,800 Number of charities provided with food donations 301 230 Product donations for charities (Number of servings) 216,612 239,616 Total number of product servings donated 1,069,854 1,119,844 Total financial value (SAR million) 0.9 1.0 Support for vulnerable groups Number of lower income couples provided with weddings 1,200 1,400 Number of children at orphanages and charities provided with Iftars 40 58 Charity, orphanage and other association event sponsorships (Number of beneficiaries) 80 172 Total financial value (SAR million) 0.4 0.5 Support for learning and technical, vocational and education training (TVET) Number of TVET beneficiaries (Dairy & Food Polytechnic) 505 486 University student groups sponsored (Number of beneficiaries) 70 340 Braille booklets (Number of books donated) N/A 500 Dental care campaign (Number of schools attended) 20 32 Almarai site visit program (Number of visitors) 73,286 88,030 Sponsorship of Food Loss and Waste Index and awareness campaign (value in SAR). N/A 100,000 Sponsorship of Qaderoon documentary (value in SAR) N/A 113,000 Total financial value (SAR million) 35.3 30.2 Sponsorship of awards Number of award winners 119 162 Total financial Value (SAR million) 3.0 3.0
Note: Figures for 2018 have been restated in some instances due to recategorization; N/A stands for not applicable.
30 Almarai Sustainability Report 2019 www.almarai.com 31 Protecting the Planet
Our promise to minimize our impact on our shared natural resources every day.
32 Almarai Sustainability Report 2019 Protecting the planet
Water management We are working to make sure we are effectively using water resources every day.
Packaging innovation
We are working to make sure we reduce the impact of our packaging on the environment every day.
Climate change
We are working to make sure we implement more sustainable solutions to reduce our emissions every day.
Waste management
We are working to make sure that we are moving towards zero to landfill every day.
Sustainable agriculture
We are working to make sure that our agricultural practices are regenerative every day.
www.almarai.com 33 Protecting the Planet
Our strategic goals and targets
To support our commitments towards ‘Protecting the planet’ and enhance our accountability, we have identified the following goals and targets.
Water management • Increase water efficiency across our Manufacturing, Sales, Distribution and Logistics Divisions by 15% by 2025 (against a 2018 intensity baseline) • Initiate and support collaborative efforts with stakeholders to address water risk and enhance conservation by 2025
Packaging innovation • Avoid the use of 9,000 metric tons of plastics from entering the consumer waste stream by 2025 (against a 2015 baseline) • Actively support the transformation of the packaging economy in KSA by 2025
Climate change Transport and refrigeration • Explore and trial alternative fuel vehicles for our sales transport fleet on an ongoing basis • Increase the fuel efficiency of our sales, distribution and logistics vehicles by 10% by 2025 (against a 2018 baseline) • 100% of our sales depot cold stores will be CFC free by 2025
Energy • Reduce energy consumption across our Manufacturing, Sales, Distribution and Logistics Divisions by 15% from efficiency measures by 2025 (against a 2018 intensity baseline) • Increase the share of electricity from clean energy sources across our Administration, Manufacturing, Sales, Distribution and Logistics Divisions to 20% by 2025 • Achieve ISO 50001 certification for our Administration, Manufacturing, Sales, Distribution and Logistics Divisions by 2025
Waste management • Reduce waste going to landfill across all our divisions by 50% by 2025 (against a 2018 baseline)
Sustainable agriculture • Enhance sustainable practices on our arable farms by 2025
34 Almarai Sustainability Report 2019 Water management We are working to make sure we are effectively In line with Saudi Arabia’s Vision 2030, and considering Saudi Arabia’s current and impending water challenges, using water resources water conservation and stewardship are at the forefront of our environmental goals. every day.
In 2019, we formed a water steering group as part of our sustainability strategy development process. The group was instrumental in setting our water management targets and action plan for improving water efficiency across our operations over the coming years. The group will continue to serve as a collaborative knowledge sharing platform and will play an important role driving initiatives to enhance our water culture over the coming years. In 2020, we are planning to expand surveying of employees to better understand behaviors and identify improvement areas in support of this aim.
During the past year we implemented several successful changes across our operations from the installation of various water saving devices to optimizing cleaning processes. We also commissioned a new system for water reuse in our dairy and juice operations which is estimated to reduce groundwater consumption by 14% over the next five years. In our Sales Division, we have installed a water recycling system for vehicle washing as part of a trial. In 2020, we are planning to install similar systems at 9 further sales depots and we estimate that this will contribute to a 65% reduction in vehicle wash down water consumption. In line with our Almarai has been a member of the Alliance for Water strategic sustainability goals, we have set a target to increase Stewardship (AWS) since 2018. As part of the AWS, water efficiency across our Manufacturing, Sales, Distribution Almarai is part of a global collaboration of businesses, and Logistics Divisions by 15% by 2025 (against a 2018 non-governmental organizations and the public sector intensity baseline). working to achieve good water stewardship practices. In 2020, and in line with our strategic sustainability goal, to initiate and Our approach to dairy farming is focused on maximizing support collaborative efforts with stakeholders to address milk yield per cow. Such an approach reduces the number water risk and enhance conservation by 2025, we are planning of cattle required to meet our market demand. This focus to self-assess our dairy farming operations against the on yield efficiency reduces the total water requirements for AWS guidance. animal drinking water and growing animal feed for our cattle. Therefore, less water input is required overall to supply market demand by driving yield efficiency on our dairy and arable farms.
Our performance summary 2018 2019 Water withdrawal (m3) 11,685,518 12,247,436 Water recycling and reuse (m3) 1,643,355 1,665,798 Percentage of water recycled and/or reused (%) 14.1% 13.6% Total water consumption (m3) 13,328,873 13,913,234 Water discharge (m3) 8,142,212 8,946,156 Manufacturing water intensity (m3/metric ton of finished product) 5.0 5.5
Note: Water data excludes poultry, dairy, and arable farming; figures for 2018 have been restated in some instances, see Appendix H for details.
www.almarai.com 35 Protecting the Planet
Packaging innovation We are working to make sure we reduce the impact Packaging waste is a global challenge that we are committed to help resolve. This requires a holistic approach to be of our packaging on the taken by understanding how consumers use our products environment every day. in conjunction with the requirements of our supply chain. By using innovative designs, materials and technologies we can not only reduce the amount of materials entering the waste stream but contribute to greater supply chain efficiency. Packaging is an essential material that protects and preserves our products throughout the supply chain, which is why we are continually improving our packaging solutions to maintain the best possible freshness and taste.
2019 has been a successful year overall in terms of weight Almarai has introduced reduction across Almarai’s portfolio with 2,945 metric tons oxo-biodegradable of plastics being removed from our primary packaging and an additional 902 metric tons of paper being removed from compliant plastic films our secondary packaging. We also revisited the palletization in alignment with government regulation in 2019. of our incoming packaging that resulted in increased load efficiency reducing the number of deliveries on the roads.
Plans are already in place to remove additional plastic In 2019, the combined weight of tonnage from our primary and secondary packaging in 2020, our paper and plastic packaging in line with our strategic sustainability goal, to avoid the use reduction amounted to nearly of 9,000 metric tons of plastics from entering the consumer waste stream by 2025 (against a 2015 baseline). 3,850 metric tons Our ability to further drive change is highly dependent on which is about the the public sector working with the private sector. We have same weight as 2,750 therefore set a goal to actively support the transformation average family cars. of the packaging economy in KSA by 2025, as part of our strategic sustainability goals.
More than just a new bottle
2019 saw the introduction of our new 200 ml juice bottle which gave Almarai the opportunity to redesign this popular bottle to address the needs of the consumer in the most resource efficient manner. The new bottle offers the convenience of a narrow neck, which is easier to drink from whilst “on the go,” with a size and shape which fits comfortably in the hand. By adopting the latest lightweight design of narrow neck, it was possible to reduce the bottle weight by almost 25%, making it the lightest 200ml juice bottle in the region. In addition, the outer packaging was changed, removing the cardboard tray resulting in a further 600 metric tons of packaging from entering the waste stream.
36 Almarai Sustainability Report 2019 Our performance summary 2018 2019 Percentage of card board coming from recycled materials used as an input material (%) 65% 65% Plastics removed from packaging (tons) 283 2,945 Paper removed from packaging (tons) 128 902 Total packaging removed from the consumer waste stream (tons) 411 3,847
Climate change We are working to make sure we implement more We continually work on reducing the environmental footprint of our business, in part, because we are conscious of the sustainable solutions to inherent risks from climate change. Rising fuel costs and the greenhouse gas emissions associated with fuel and electricity reduce our emissions consumption have an impact not only on the environment every day. but also on our financial bottom line. Almarai’s Energy Team has developed an “Energy Roadmap,” outlining how Almarai will improve its energy performance through efficient energy consumption and generation from sustainable sources. Our energy strategy focuses on solar power generation and battery storage, LED lighting technology, enhanced Climate change potentially creates risks for agricultural energy monitoring, and improving Almarai’s energy culture production including drought, pest and disease issues as well. through awareness. These can pose challenges to maintaining and increasing production levels over the long term. We therefore look to adjust our practices to enable us to meet our production needs now and in the future.
www.almarai.com 37 Protecting the Planet
Energy efficiency Clean energy
In 2019, we completed Phase I of our LED lighting upgrade In 2019, we commissioned solar panels at our main across our Sales and Manufacturing Divisions and head manufacturing site in KSA, in addition to our existing sales offices, and commenced Phase II of our LED upgrade depot solar rooftop installations. By the end of 2019, we program. Once completed, we will have replaced more than increased our clean energy generation capacity to 17 MWp, 70,000 lights across our facilities. From Phase 1 alone, we producing more than 30,000 MWh of clean energy annually. have estimated that our lighting load has been reduced by On average, sites fitted with solar panels are drawing up to 70%, which translates to a reduced energy demand for 30% of their energy demand from this clean energy source. lighting of over 10 million kWh. We are on track that 100% of We also began construction on a 12 MWp solar project at our our lighting will be LED in our KSA operations over the coming manufacturing site in Hail (KSA), and this is scheduled to year. Several energy saving initiatives are underway and be commissioned by the end 2020. In addition, during 2020, additional ones are being developed. In line with our strategic we also plan to install 12 further solar rooftop installations at sustainability goals, we have set a target to reduce energy our sales depots across the GCC. In line with our strategic consumption across our Manufacturing, Sales, Distribution sustainability goals, we have set a target to increase the and Logistics Divisions by 15% from efficiency measures by share of electricity from clean energy sources across our 2025 (against a 2018 intensity baseline). Administration, Manufacturing, Sales, Distribution and Logistics Divisions to 20% by 2025. As part of our fuel efficiency initiatives, we were able to roll out 392 of the planned 425 biofuel vehicles in the UAE by the end of 2019. We also increased the number of dual temperature vehicles in our fleet. In total, 900 sales vehicles and 100 reefers had this feature, helping to further decrease the number of In 2019, we trips required. Other initiatives which helped to increase fuel efficiency in 2019, include the following: 100% of our short-haul avoided emitting vehicles have been fitted with engine idle timers, 100% of both our short-haul and long-haul vehicles have been fitted more than 6,250 with vehicle speed restrictors. These modifications have help metric tons CO2e to increase overall efficiency, and in the case of short-haul from relying on renewable solar energy, which is vehicles, we have seen a 9% increase in fuel efficiency. In line equivalent to planting nearly 540 hectares of trees. with our strategic sustainability goals, we have set a target to increase the fuel efficiency of our sales, distribution and logistics vehicles by 10% by 2025 (against a 2018 baseline).
We have also set a goal to explore and trial alternative fuel vehicles for our sales transport fleet on an ongoing basis. In the future, we will be piloting different alternatives.
38 Almarai Sustainability Report 2019 Energy culture Refrigeration
Energy awareness is an important element of our overall Our cold chain distribution system relies upon refrigeration energy management strategy and ability to capitalize on at all stages, from farm to shelf. We are constantly improving technological solutions. Our energy steering group was efficiencies in this area as we are aware that the use of certain instrumental in setting our energy management targets refrigerants such as R22 contribute to climate change. and action plan for improving energy efficiency across our We have an active program to replace R22 refrigerants with operations over the coming years. The group will continue to CFC (Chlorofluorocarbons) free alternatives such as 134a serve as a collaborative knowledge sharing platform and will and R404A, which not only perform better, but also reduce play an important role driving initiatives as we work towards atmospheric emissions that contribute to global warming. In our strategic goals. 2019, we continued to upgrade our sales depot cold stores and by the end of the year, 70% are now CFC free. In line with our In 2020, we will be implementing Phase 1 of an energy strategic sustainability goals, we have set a target that 100% monitoring system and improving metering to better of our sales depot cold stores will be CFC free by 2025. understand energy consumption patterns, which will In 2020, we are planning to upgrade an additional 7 sales invariably enable us to improve our performance. In line depot cold stores. with our strategic sustainability goals, we have set a target to achieve ISO 50001 certification for our Administration, Currently 95% of our refrigerated transport vehicles are CFC Manufacturing, Sales, Distribution and Logistics Divisions by free with the remaining 5% to be replaced at the end of their 2025. Through achieving this certification, we will be able to lifecycle. All in-store refrigerators are currently CFC free, and build a more robust culture and drive further improvements. in 2020, we will be making modifications to reduce refrigerant In support of this target, we are planning to engage usage by 25%. employees through surveying, awareness campaigns, and will prepare for ISO 50001:2018 certification at our head offices this coming year.
Our performance summary 2018 2019 Direct stationary energy usage (in thousands kWh) 801,850 836,570 Indirect stationary energy usage (in thousands kWh) 845,531 936,070 Total stationary energy usage (direct and indirect, in thousands kWh) 1,647,382 1,772,640 Solar energy usage (in thousands kWh) 2,421 22,095 Percentage of electricity consumption from solar (%) 0.2% 1.6% Almarai owned refrigerators in stores (in thousands kWh) 906,305 961,093 Manufacturing energy intensity (kWh/metric ton of finished product) 512.3 549.8 Total vehicle fuel consumption (thousands of liters) 410,512 357,485
Scope 1 (direct) emissions (metric tons CO2e) 1,113,639 1,005,862
Scope 2 (indirect) emissions (metric tons CO2e) 718,292 795,419
Scope 3 emissions from Almarai refrigerators in stores (metric tons CO2e) 780,088 827,246
Total emissions (metric tons CO2e) 2,612,019 2,628,528
Manufacturing emissions intensity (metric tons CO2e/metric ton of finished product) 0.30 0.32
Emissions from refrigerant leakage and replacement (metric tons CO2e) 167,686 200,036
Note: Figures for 2018 have been restated in some instances, see Appendix H for more details; emissions cover stationary energy, transportation and refrigerants only.
www.almarai.com 39 Protecting the Planet
Waste management We are working to make sure that we are moving At Almarai, we are committed to protecting vital food resources by reducing waste. One of the most effective ways towards zero to landfill of reducing food waste is prevention. To this end, we are working hard to ensure that our demand forecasting is highly every day. accurate to avoid food waste generation and unnecessary cost to the business and the environment. Where possible, we also seek to recycle as much packaging and process waste as we can from both our manufacturing and distribution facilities. We now recycle waste cardboard and shrink wrap from our Redistributing food surplus and waste sales depots. This is collected by a waste management company and recycled into various other materials, diverting it from landfill. We are always exploring new options to redistribute unused food surplus for human consumption. We We have been conscious of understanding where our waste collaborate with local food regulatory bodies in Oman, goes and reviewing this against the waste hierarchy. In the Bahrain and the UAE, like the Dubai Municipality, GCC we have been working on several initiatives that look to, for example. We redistribute food, juice and dairy where possible, keep waste in the more favored prevention products still in date to local charities and food banks category on the waste hierarchy, treating it as food surplus to minimize environmental impact and support those in and avoiding disposal to landfill. need. In 2019, we redistributed 269 tons of food surplus to these good causes. In 2019, we formed a waste steering group as part of our sustainability strategy development process. The group When we are not able to redistribute the food surplus was instrumental in setting our waste management targets to humans, we redirect surplus to animal feed, so it and action plan for improving waste diversion across our has a more useful purpose. In 2019, more than 39,000 operations over the coming years. The group will continue to tons of bakery, poultry and dairy waste has been sent serve as a collaborative knowledge sharing platform and will to various organizations for animal feed purposes, play an important role driving initiatives as we work towards representing over a 20% increase from the our strategic goal, to reduce waste going to landfill across all previous year. our divisions by 50% by 2025 (against a 2018 baseline). Finally, in another project in Dubai, we are working with During the coming year, we will be making a concerted effort a third-party provider who currently takes food and under the direction of the waste steering group to identify dairy waste and recycles the packaging and removes additional opportunities to not only divert waste from landfill, water for reuse through reverse osmosis. In 2020, we but to reduce it at source. We have plans underway to expect to commence a new partnership to redirect identify partners with innovative solutions as well as in-house a significant element of surplus products to ensure solutions. In 2019, across our divisions we have commenced a the plastic is recycled, the water recovered, fats are waste avoidance program with over 15 different interventions converted into biofuels and proteins into animal feed. using the DMAIC (Define, Measure, Analyze, Improve, and Control) methodology. This program has contributed to our understanding of our overall waste issues and management approaches for the future.
Our performance summary 2018 2019 Food waste resold for animal feed (Store returns and operational) (metric tons) 32,375 40,086 Recycled waste (metric tons) 16,577 22,071 Total waste generated (metric tons) 184,512 202,738 Waste sent to landfill (metric tons) 135,954 141,292 Percentage of waste sent to landfill (%) 74% 70%
Note: Figures for 2018 have been restated in some instances, see Appendix H for more details.
40 Almarai Sustainability Report 2019 Sustainable agriculture We are working to make sure that our agricultural Almarai owns Fondomonte, who operate our arable farms located in primarily Argentina and the United States. Ensuring practices are regenerative that we produce the highest quality feed for our dairy herds in Saudi Arabia is as important as our commitment to ensuring every day. sustainable agricultural practices.
We utilize best land-use practices to ensure land productivity In California, where we rely on irrigation canals, we have on our arable farms and continue to adopt regenerative ongoing work to line them with concrete to increase flow and farming practices where possible. Regenerative farming reduce water loss from both evaporation and aquatic plant life. practices are important for the long-term sustainability All canals are gravity fed and rely on no energy for pumping. of our arable farms through contributing to the health In our United States and Argentina operations, we monitor and vitality of the soil through microbial development water use in line with local regulations and maintain ongoing and topsoil regeneration, while also supporting bio dialogue with local bodies governing water management. and carbon sequestration, soil structure, and overall ecological biodiversity. In California, we participate in a In the United States, we ceased transporting feed from our land conservation program, where around 15% of the land arable farms to port by truck in 2019. Feed is now transported lays fallow at any given time to support soil regeneration. by train to port for shipping. Although this has increased our In Argentina, environmental impact assessments are internal fuel consumption, as we no longer rely on third-parties conducted on a regular basis on alfalfa farms. We carefully to transport the feed, there is a substantial indirect benefit monitor the application of fertilizer and pesticides in line with in terms of emissions related to the transport of feed. This local regulations and maintain ongoing dialogue with local change means that around 550 trucks per week are removed environmental regulatory bodies in both countries. from roads making the 250-mile journey from Arizona and the 190-mile journey from California. Our arable farming operations based in the United States and Argentina, utilize irrigation methods most suitable for In line with our strategic sustainability goals, from 2020 we the environment. We have invested heavily in irrigation will be making a concerted effort to enhance sustainable infrastructure since acquiring the farms in the United States. practices on our arable farms by 2025. To support this goal, For example, our arable farms in Arizona use a combination we will be assessing our arable farming operations and of highly efficient subsurface drip and pivot irrigation. developing improvement plans over the coming year.
www.almarai.com 41 Protecting the Planet
Excelling in health and safety Engaging with the community
All of our operational Fondomonte USA sites are Fondomonte USA has appointed a ‘community SHARPs (Safety & Health Achievement Recognition engagement champion’ at each of its three operational Program) certified, an OSHA (Occupational Safety sites. Community engagement champions are and Health Administration) accreditation program. responsible for coordinating engagement activities The SHARPs certification recognizes small and and allocating charitable donations to where they are medium business employers who have used OSHA’s most needed and valued within the community. On-Site Consultation Program services and operate exemplary safety and health programs. In Arizona, we We provide ongoing support to several activities were the first agricultural operation to ever be awarded such as 4-H (Young Farmers of America), a program with this certification. This is a demonstration of the administered by the National Institute of Food and steps Fondomonte USA has taken over and above Agriculture of the United States Department of industry standards to ensure our employees’ health Agriculture. The program works to inspire youth and wellbeing. to enter agricultural careers, providing them with awareness and skill building through applied projects.
Fondomonte USA also provides support to local schools when the need arises whether it be school supplies for those in need or equipment, we are proud to give back to the communities where we operate.
Creating a positive economic impact
In 2019, Fondomonte USA commissioned an independent million over the last five years. These investments have consulting firm to assess its economic and fiscal impact. created 2,082 jobs in the country, over $111.0 million in The findings highlight Fondmonte USA’s positive wages, and over $335 million in economic output. contribution to its locations of operation. In total, the annual business activities for Fondomonte Fondomonte USA has made significant capital USA support 2,538 jobs, over $132.7 million in wages, and investments in both Arizona and California. As of 2018, over $385.8 million in annual economic activity. a total of $301.4 million in capital expenditure has been spent in the United States. The total economic output created by Fondomonte from their arrival through 2018 is estimated at over $1.3 billion for Capital improvements related to the construction activity the United States. on the farms has been estimated to be nearly $127.0
Fondomonte | Performance summary 2018 2019 Number of incidents of non-compliance with environmental laws and regulations 0 0 Arable farming land under production (hectares) – USA 7,840 8,269 Arable farming land under production (hectares) – Argentina 24,314 24,098 Total arable farming land under production (hectares) 32,154 32,367
42 Almarai Sustainability Report 2019 www.almarai.com 43 Producing Responsible Products
Our promise to deliver “Quality you can trust” and enhance supply chain sustainability every day.
44 Almarai Sustainability Report 2019 Producing responsible products
Quality and food safety We are working to make sure our products are safe and satisfy consumers’ needs every day.
Animal welfare
We are working to make sure that our animals are treated and handled humanely throughout their lifecycle every day.
Ethical sourcing
We are working to make sure we take a collaborative approach to elevate sustainability in our supply chain every day.
www.almarai.com 45 Producing Responsible Products
Our strategic goals and targets
To support our commitments towards ‘Producing responsible products’ and enhance our accountability, we have identified the following goals and targets.
Quality and food safety • All manufacturing sites will be Global Food Safety Initiative (GFSI) certified by 2025 • All high-risk ingredient suppliers will be Global Food Safety Initiative (GFSI) certified by 2025
Animal welfare • Achieve global animal welfare certification for our dairy and poultry farming operations by 2025
Ethical sourcing • Put an ethical sourcing process and audit plan in place by 2025
46 Almarai Sustainability Report 2019 Quality and food safety We are working to make sure our products are safe Our promise to all stakeholders is to deliver “Quality you can trust.” Since 1977, we have been committed to providing and satisfy consumers’ products and services that are manufactured to global best practice standards in food safety and quality. needs every day.
The integrity of the Almarai food safety and quality systems is the shared responsibility of all Almarai employees to ensure “Quality you can trust” in all our products. The capability and effectiveness of our systems is supported by training and Leading the market in food safety various multilevel internal audit programs, independently verified by globally recognized certification and inspection bodies who carry out both announced and unannounced In 2019, the 2nd annual Almarai Food Safety conference system audits and physical inspections at our sites. focused on the following theme, “What happens when food safety goes wrong?” The conference looked Our facilities hold various certifications which include at various company case studies from around the ISO 22000 Food Safety Management and ISO 9001 Quality world seeking to drive change on real issues facing Management. Furthermore, our Infant Nutrition Division our industry and contributing to practical solutions and our Poultry Manufacturing Division achieved Food Safety applicable to food safety systems, processes, System Certification (FSSC) 22000 certification which is practices and behaviors. This year’s conference a Global Food Safety Initiative (GFSI) recognized scheme attracted more than 150 delegates, including which will be extended to other manufacturing sites in international food safety experts and representatives due course. from various ministries in KSA. In the future, we see this conference as becoming an important industry In 2019, we reviewed our supplier risk profiling and audit platform to raise the bar on food safety across KSA. program to increase its robustness and to further reduce potential quality and food safety issues within our supply chain. In line with our strategic sustainability goals, we have set a target that all high-risk ingredient suppliers will be GFSI certified by 2025.
Harnessing the power of big data and our agility to do so have both greatly improved in 2019. We have carried out extensive work on how our system integrates across the business, and we are continuing to expand the scope in terms of the information being gathered from our processes and systems. Improved data collation and analytics are helping us to better understand process compliance and improve decision making.
To maintain our strong quality and food safety performance, One of the key messages from the conference was we recognize that it is also important that our employees that even when a system is in place, things can go are well trained within a quality culture. Employees are wrong. We wanted to reflect this in our own approach provided with tailored training on an annual basis provided by and as a result we conducted an end-to-end review of international experts such as AIB International and Campden our Hazard Analysis Critical Control Points (HACCP) BRI (UK). In 2019, we also provided training to our executive process to ensure that our comprehensive approach to management on FSSC and GFSI certification. We continued food safety risk is standardized across Almarai. rolling out our quality and food safety survey across more areas of the business, reaching 2,000 employees by the end of 2019, the analysis of which is providing us with new insights, and has identified actionable areas for improvement. For example, we have developed a recognition program which is set to be launched in 2020.
www.almarai.com 47 Producing Responsible Products
Achieving Global Food Safety Initiative (GFSI) certification
The Global Food Safety Initiative (GFSI) brings together key factors to drive continuous improvement in food safety management systems around the world. Our shared belief in continuous improvement has been a key driver in our interest to measure ourselves against the world’s most prominent food safety management accreditation. In line with our strategic sustainability goals, we have set a target that all manufacturing sites will be Global Food Safety Initiative (GFSI) certified by 2025.
In 2018 our Infant Nutrition Division was the first to achieve this distinction, and in 2019, our Poultry Manufacturing Division achieved certification against the GFSI requirements. In 2020, we will move forward with preparing our Dairy, Juice and Bakery Divisions for certification.
Our performance summary 2018 2019 Percentage of production volume manufactured in sites certified by an independent third party 100% 100% according to internationally recognized food safety management system standard (%) Number of incidents of non-compliance with regulations and/or voluntary codes concerning the 0 0 health and safety impacts of products and services
Number of recalls 0 0
Percentage of significant product categories covered by and assessed for compliance with 100% 100% product information and labeling procedures (%)
Total number of manufacturing plants 10 10
48 Almarai Sustainability Report 2019 Animal welfare We are working to make sure that our animals We are committed to safeguarding the health and wellbeing of all animals within our care, as this impacts not only the are treated and handled animal’s quality of life, but also the quality and safety of the food we produce. We ensure that the animals we raise to humanely throughout their produce our products are properly and humanely treated lifecycle every day. throughout their lifecycle. We follow the World Organization for Animal Health (OIE) guiding principles on animal welfare, as well as the universally recognized ‘Five Freedoms’ for animals under human control.
Almarai’s farms look after our livestock to an exceptionally high standard, ensuring maximum yields and quality. Our Holstein dairy herds have 24-hour support from professional veterinary teams, year-round shaded housing, and air cooling and showering. Cows are fed a healthy diet that is specifically formulated for their needs.
We go to great lengths to ensure the right amount of feed is fed by using high quality ingredients sourced from well managed farms. Poultry flocks receive best-in-class care, ensuring that health consistently exceeds global standards. Such standards are achieved by focusing on high levels of husbandry and nutrition for our birds. For example, we have a unique air filtration system in our broiler farms. Broilers are housed in climate-controlled barns and are provided with a healthy diet. Almarai also does not use cages on any of our Therapeutic antimicrobials are not used in our cows as an poultry farms. alternative to good management. We have a health plan to continually improve our cows’ health with an emphasis on effective vaccination, good husbandry and best hygiene practices. During treatment, our cows are removed from In 2019, we had and raised production until treatment has been completed and they test more than more than negative for antibiotics in their milk. With our broiler chickens, we do not use antimicrobials (antibiotics) ever. 180,000 191 million cows chickens. In 2020, and in line with our strategic goal to achieve global animal welfare certification for our dairy and poultry farming operations by 2025, we are planning to select a certification in our herd in Saudi Arabia standard, conduct a self-assessment on a limited number of selected sites, and after implementing any corrective actions, achieve certification on those sites.
Our performance summary 2018 2019
Number of cows 188,071 180,504
Number of chickens processed 157,372,110 191,103,518
Number of incidents of non-compliance with laws and regulations, and adherence with voluntary standards related to transportation, handling, and slaughter practices for live terrestrial and 0 0 aquatic mammals
Percentage of cows in enclosed housing with resting areas (%) 100% 100%
Percentage of chickens in enclosed cage free housing (%) 100% 100%
www.almarai.com 49 Producing Responsible Products
Ethical sourcing We are working to make sure we take a collaborative Suppliers play an integral role in our ability to deliver on our commitments to sustainability. At Almarai, we believe that to approach to elevate become a more sustainable company, we must work with our suppliers to ensure they act ethically. sustainability in our supply chain every day. Ensuring that the materials and services we use are ethically sourced is not only the right thing to do, but it also stimulates sustainability performance improvements for the entire company and supply chain. It is key towards ensuring a sustainable future for our business and positioning us as a leader in sustainability.
We also believe that we have a duty to our consumers to ensure that the materials and services we use are ethically sourced. Consumers and stakeholders have increasing concerns about their personal health, not only with regards to their consumption of products, but also to the impact that the products may have on the factors of production, including workers and resources.
As a market leader in the food and beverage industry in the region, and the world’s largest vertically integrated dairy company, we understand that our suppliers need to behave in an ethically responsible manner. To this end, Almarai has a Supplier Code of Conduct. In line with our strategic sustainability goals, we have set a goal to put an ethical sourcing process and audit plan in place by 2025. We have identified several actions to undertake during the coming year to help us better understand supply chain risks that go above and beyond food safety and quality concerns and to enhance supplier due diligence.
Our performance summary 2018 2019
Percentage of locally based suppliers engaged (%) 50% 51%
Percentage of spending on locally based suppliers (%) 45% 41%
Percentage of purchased volume from suppliers compliant with company's sourcing policy NIA NIA
Percentage of purchased volume which is verified as being in accordance with credible, NIA NIA internationally recognized responsible production standards
New suppliers that were screened using social and/or environmental criteria 0 0
Number of negative social and/or environmental impacts in the supply chain and actions taken NIA NIA
Note: NIA stands for no information available.
50 Almarai Sustainability Report 2019 Our subsidiaries
Beyti
Teeba
www.almarai.com 51 Our Subsidiaries
Beyti will continue to focus on water efficiency and recycling Beyti in 2020 and is planning to roll out water reuse systems for cleaning. Over the coming year, Beyti will focus on implementing waste management and green building Beyti is one of the largest solutions. Some key solutions will focus on identifying opportunities to sell food waste for animal feed and recycling producers of milk, juice and packaging, as well feasibility planning for a zero-energy yoghurt products in Egypt, multipurpose meeting room. and a subsidiary of Almarai Company, under the joint Reclaiming desert lands venture IDJ. In 2019, Beyti commenced an afforestation project to utilize water from its effluent treatment plant to forest an area of 29,400 m2 adjacent to its manufacturing facilities. In total, 400 trees will be planted and will
As a leader in the Egyptian market, Beyti is working to embed sequester an estimated 2.3 tons of CO2e annually. sustainability within its operations. To this end, Beyti has established an environmental and sustainability function responsible for managing sustainability companywide.
This section of the report outlines Beyti’s approach to managing sustainability and highlights the achievements it Community engagement has made in 2019 and its plans for the year ahead. Beyti engages in several activities to support education throughout the year. Beyti has a factory visit program for Environmental performance primary and secondary schools, providing an overview of the production process, quality and safety, and sustainability. In 2019, Beyti has put in place an environmental roadmap On average, more than 500 students a year visit the business. with key actions through to 2021, covering the following areas: environmental management systems and compliance; Beyti also hosts agricultural and engineering students and carbon and energy; water; operational and food waste; provides technical presentations to support their studies. and supplier and contractor environmental performance On average, Beyti welcomes more than 230 university management. Beyti’s roadmap is a commitment to ensure students a year as part of this educational program. Beyti is that its Environmental Policy is put into action. The policy currently working to build relationships with local universities sets out the company’s commitment to support and preserve to support research programs in the years ahead. the environment in which it operates, responding to its key environmental impact areas as a business.
Over the past year, Beyti has implemented several initiatives to optimize energy and water consumption from process and equipment modifications, helping Beyti reduce water consumption by up to 105 m3 per day and 398,000 kWh per day. Some of the biggest improvements have come from installing a boiler economizer and switching to LED lights. For example, the upgrade to LED lighting has contributed to a 40% lighting energy demand reduction.
In 2020, Beyti will commission a 6.7 MWp solar array at its manufacturing site, which will provide more than 30% of peak electricity demand. Once all phases of the 20 MWp solar array project are completed, Beyti will draw an estimated 19% of its total electricity demand from clean energy. In addition to switching from diesel to natural gas boilers, these improvements will significantly reduce the carbon intensity of Beyti’s manufacturing facilities.
52 Almarai Sustainability Report 2019 To support Egyptian youth’s transition into the workforce, Beyti operates a paid internship program for university Supporting charitable causes students. In its third year, Beyti’s internship program hosted 43 interns for 2 months each. In 2019, 4 interns joined as Beyti supports community members in need full-time employees following graduation. In total, of the through product donations and other charitable 81 interns hosted, 8 have joined as full-time employees causes. Every Ramadan, Beyti hosts daily “Iftars” following the program. Beyti also runs a job shadowing at its manufacturing site and engages with local program to help support university students to identify non-governmental organizations. In addition, they potential career opportunities. sponsored an event for over 100 orphans in 2019.
Offering career opportunities Developing employees Beyti’s “Kaseeb” program helps the company enhance its distribution coverage into rural areas, All 3,000+ management and supervisory employees while offering gainful employment opportunities have bespoke performance objectives with access for Egyptians. Through relationships with banking to leadership and development programs and institutions, “Kaseeb” participants can purchase e-learning courses. Beyti also provides manufacturing small distribution vans and become Beyti sales employees with skills development training and has agents, managing their own sales routes. Beyti developed competency assessments for 2020 to Sales employees also provide on-going support and support their professional development. In addition, coaching to “Kaseeb” sales agents. 39 employees have been identified to become internal training facilitators for Almarai food safety, ISO and Launched in 2018, the program is a great success. hygiene courses. Currently 200 “Kaseeb” sales agents are managing over 100 routes, and Beyti is targeting to increase this number to 240 in 2020.
Prioritizing safety for all
In 2019, Beyti has prepared to upgrade its health and safety management certification to ISO 45001. Beyti continues to engage in activities which support building a strong health and safety culture, from the development of a near miss reporting program to road safety campaigns, Beyti is working to ensure the safety of all.
‘Quality you can trust’
Beyti lives by Almarai’s motto, ‘Quality you can trust.’ To support the company to deliver only the highest quality products, Beyti follows the same quality audit process as Almarai. Beyti’s main manufacturing plant is GFSI certified.
www.almarai.com 53 Our Subsidiaries
Teeba Environmental performance
Over the past year, Teeba has implemented several initiatives Teeba is one of the largest to optimize energy and water consumption from process and equipment modifications. In 2019, Teeba converted its boilers producers of dairy products to heavy fuel oil from diesel. This modification will contribute to reducing the carbon intensity of Teeba’s manufacturing in Jordan, and a subsidiary of facilities. Teeba is also in the process of switching to LED lighting. In total, lighting loads will be reduced by up to an Almarai Company, under the estimated 15%. Following the review of cleaning processes, joint venture IDJ. the modifications Teeba has made have further supported reducing overall water and energy use requirements.
In 2019, Teeba commissioned a 0.35 MWp solar array at As a leader in the Jordanian market, Teeba is working to its head offices, contributing 50% of the site’s total energy embed sustainability within its operations. Sustainability consumption in 2019 alone. In 2020, further planning for a management is currently decentralized but coordinated by 0.5 MWp solar array at Teeba’s manufacturing plant is Teeba’s Quality and Regulatory Department. scheduled pending approval from the Jordanian Electric Power Company. This section of the report outlines Teeba’s approach to managing sustainability and highlights the achievements it has made in 2019 and its plans for the year ahead.
54 Almarai Sustainability Report 2019 Community engagement
Teeba works to support the local community through various events throughout the year. During the past year, Teeba organized an event for World Cleanup Day, where employees volunteered to collect waste in the areas adjacent to its manufacturing site. In 2019, Teeba also organized a breast cancer awareness and blood donation campaign in co- operation with the King Hussein Cancer Foundation (KHCF) and supported the KHCF’s ‘Run for Life initiative,’ donating juice to the participating Jordanian schools.
Teeba hosted nearly 900 visitors from schools, universities and governmental bodies during 2019. In total it also donated over 7,500 food servings to charitable organizations.
‘Quality you can trust’
Teeba lives by Almarai’s motto, ‘Quality you can trust.’ To support the company to deliver only the highest quality products, Teeba follows the same quality audit process as Almarai. Currently Teeba’s manufacturing plant is ISO 22000 certified, and this will be extended to sales depots in the coming year.
www.almarai.com 55 Appendices / GRI Content Index
56 Almarai Sustainability Report 2019 Appendices / Gri content index
Appendix A Defining and prioritizing the issues that matter the most
Appendix B Stakeholder mapping
Appendix C Topic boundaries
Appendix D GRI content index
Appendix E Sustainability strategy boundaries
Appendix F Alignment to NTP
Appendix G Alignment to SDGs
Appendix H Sustainability in numbers
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Appendix A Defining and prioritizing the issues that matter the most
Our materiality process Our 2019 materiality assessment
We use the principle of materiality to identify the economic, In 2019, we reviewed our list of 20 material issues from 2018 social, and environmental issues that matter most to our against international industry guidelines, frameworks and business and our stakeholders. By considering the concerns industry peers, along with analysis of our operating market of our stakeholders, alongside the risks and opportunities and regulatory landscape. We engaged internal stakeholders that face our business, materiality helps us prioritize where to supplement our market analysis. Based on internal to focus our efforts to enhance stakeholder value and our feedback and external considerations, we have consolidated sustainability performance. Materiality also guides us on what our list of material issues from 20 to 12 issues and replotted we should report on publicly. them on the matrix below. We consider governance to be material and interwoven throughout our sustainability We conducted a formal materiality assessment engaging framework rather than a standalone topic. We continue both internal and external stakeholders in 2018. In 2019, to address governance vis a vis our annual report and we conducted an internal review of materiality. We intend to GRI-based disclosures. Our materiality update was validated conduct another formal materiality assessment in 2021. by our executive management. In the interim, we will monitor priority issues considering internal and external considerations on an ongoing basis.
Our approach to materiality is consistent with the GRI Standards.
Nutrition and wellbeing Quality and food safety Pillar theme key: Water management Climate change Caring for people Waste management Protecting the planet Packaging innovation Major Producing responsible products
Sustainable Ethical sourcing Health and safety agriculture Animal welfare Significant
Importance to stakeholders Community Employee talent investment and diversity Moderate
Importance to Almarai
Moderate Significant Major
58 Almarai Sustainability Report 2019 Appendix B Stakeholder mapping
The table below identifies our most important stakeholders, the importance of each stakeholder group to Almarai, their needs and expectations, channels for engagement with each group, and the examples of specific measures to respond to them.
Stakeholders Importance Needs and Almarai engagement How Almarai expectations channels is responding Shareholders/Investors Our shareholders and • Financial performance, • Board of Directors • Annual Report, investors provide the efficient production meetings Corporate Governance capital necessary for and growth • Public reports Code, Financial reports, sustainable growth; • Dividends • Shareholders’ Earnings presentations, therefore, Almarai’s future • Contribution to economic Rights Policy etc. growth and success development • Investor Relations • Net income growth ultimately depends • Share price • Sustainability report on its ability to attract • Data disclosure investment domestically and credibility and internationally. We are • Customer satisfaction committed to delivering • Market share long term sustainable • Publicly disclosed returns for shareholders data about our ESG and investors in a growing performance, including range of diversified strategies, targets and product lines. goals, methods for evaluation, policies, and procedures
Consumers Our consumers are at the • Product and ingredients • Social media channels • Direct dialogue with heart of our business. quality, freshness and • Visitor tours consumers on social We want consumers across safety • Website media, including the region to think Almarai • Product nutritional value • Call center Facebook, Twitter, first when purchasing food and health implications • Electronic mail YouTube, Instagram and beverages. Building • Product price and more trust and ensuring that • Brand reputation • Monthly consumer our products are the best • Environmentally sound surveys is essential to our production practices • Consumer hotline and continued growth. • Animal welfare WhatsApp • Fair and ethical marketing • International recognition and certificates • Direct communication channels
Employees Our employees are • Fair payment and • HR Policy • Housing allowance and paramount to our business benefits • Training and transport success, as they hold the • Equal opportunity development program • Life / Medical insurance commitment, dedication, • Engagement and • Training needs analysis • Annual service award and intellectual capital to motivation • Employee grievance • Recreational activities drive innovation within our • Transparent hierarchies mechanism for work/life balance organization and deliver on • Job security • Employee satisfaction • Talent assessments our strategy. • Training and career surveys (on an ad hoc • E-learning and training development basis) program • Safe work environment • Management courses • Grievance mechanisms • Almarai Academy • Graduate Professional Trainee Program
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Stakeholders Importance Needs and Almarai engagement How Almarai expectations channels is responding Governmental We deeply value our • Compliance with national • Internal audit • Corporate Governance regulatory bodies relationships with our legislation and regulation • Stakeholder meetings Code regulators and other • Contribution to economic and open dialogue • Annual Report government stakeholders, development • Public reporting • Sustainability Report as they help us ensure that • Environmentally sound • Working closely with • Regulatory team we effectively manage production practices regulators to develop meet regularly with risks to our business and • GHG emissions and improved standards government bodies produce safe, quality impact on climate representatives products for consumers. change • Corporate affairs team We are committed to • International recognition meetings complying with all legal and and certificates • Government forums regulatory requirements.
Civil society As a people centric • Corporate Social • CSR activities • Food support for lower organizations business, we believe that Responsibility (CSR) • Student learning income and vulnerable contributing to communities and engagement opportunities groups in the countries of our • Funds and financial • Food donations • Educational awards operations is important to support • Dairy and Food building trust and bonds. • GHG emissions and Polytechnic We are committed to impact on climate • Almarai Driving School ensuring that access to change quality and healthy food is • Data disclosure and not only a luxury, but a right. credibility • Animal welfare • Environmentally sound production practices • Contribution to social and economic development
Engagement in associations
As part of our engagement with stakeholders, we are members of strategic external associations.
Almarai is an active member in the following associations:
• National Dairy Committee under the Council of Saudi Chamber • National Bakery Committee under the Council of Saudi Chamber • National Poultry Committee under the Council of Saudi Chamber • National Transportation Committee under the Council of Saudi Chamber • National Labor Market Committee under the Council of Saudi Chamber • Agricultural Committee under the Riyadh Chamber of Commerce • Human Resources and Labor Market Committee under the Riyadh Chamber of Commerce • Saudi CODEX Committee • Food and Beverage Association, Dubai • Alliance for Water Stewardship • Agriculture and Food Security Council (Riyadh Chamber of Commerce)
60 Almarai Sustainability Report 2019 Appendix C Topic boundaries
Material issue Category Topic boundaries
Caring for people
Nutrition and wellbeing Social Almarai, Subsidiaries, consumers
Health and safety Social, Economic Almarai, Subsidiaries, consumers
Employee talent and diversity Social Almarai, Subsidiaries
Community investment Social Almarai, Subsidiaries, consumers
Protecting the planet
Water management Environmental, Economic Almarai, Subsidiaries
Packaging innovation Environmental, Economic Almarai, Subsidiaries
Climate change Environmental Almarai, Subsidiaries
Waste management Environmental, Economic Almarai, Subsidiaries
Sustainable agriculture Environmental, Social, Economic Almarai, Subsidiaries
Producing responsible products
Almarai, Subsidiaries, consumers, Quality and food safety Governance suppliers
Animal welfare Social Almarai, Subsidiaries
Ethical sourcing Environmental, Social, Economic Almarai, Subsidiaries, suppliers
www.almarai.com 61 Appendices / GRI Content Index
Appendix D GRI content index
GRI Standard Disclosure Page number(s)
GRI 101: Foundation 2016 General Organizational profile Disclosures GRI 102: 102-1 Name of the organization Almarai Company General Disclosures 2016 102-2 Activities, brands, products, and services Annual Report 2019 pg. 8-9 and 62-71
102-3 Location of headquarters Riyadh, Saudi Arabia Saudi Arabia, Oman, UAE, Bahrain, Kuwait, Jordan, 102-4 Location of operations Egypt, USA, Argentina and Romania 102-5 Ownership and legal form Annual Report 2019 pg. 137-141 Primary markets served: Saudi Arabia, Oman, UAE, 102-6 Markets served Bahrain, Kuwait, Jordan, Egypt 102-7 Scale of the organization Annual Report 2019 pg. 4, 8-9, 34-35 and 132-133
102-8 Information on employees and other workers 79-91
102-9 Supply chain 12-13 102-10 Significant changes to the organization and Annual Report 2019 pg. 86-87 its supply chain 102-11 Precautionary Principle or approach 14-19, 37 GRI, World Organization for Animal Health, Alliance 102-12 External initiatives for Water Stewardship 102-13 Membership of associations 60
Strategy
102-14 Statement from senior decision-maker 4-7
102-15 Key impacts, risks, and opportunities 4-7, 14-19
Ethics and integrity 102-16 Values, principles, standards, and norms of Annual Report 2019 pg. 6 and 54-55 behavior Governance
102-18 Governance structure Annual Report 2019 pg. 80 and 95
102-19 Delegating authority Annual Report 2019 pg. 96-97 102-22 Composition of the highest governance body Annual Report 2019 pg. 98 and 106-107 and its committees 102-23 Chair of the highest governance body Chair is a non-executive member.
62 Almarai Sustainability Report 2019 GRI Standard Disclosure Page number(s) 102-24 Nominating and selecting the highest Annual Report 2019 pg. 96-97 GRI 102: governance body General 102-26 Role of highest governance body in setting Disclosures 2016 Annual Report 2019 pg. 96-97 purpose, values, and strategy 102-30 Effectiveness of risk management Annual Report 2019 pg. 42-47 processes 102-35 Remuneration policies Annual Report 2019 pg. 110-111
Stakeholder engagement
102-40 List of stakeholder groups 19 102-41 Collective bargaining agreements Trade unions are not allowed in the GCC. Employees in Argentina are represented by trade unions. Employees in the USA, Jordan and Egypt are not members of trade unions. 102-42 Identifying and selecting stakeholders 58-60
102-43 Approach to stakeholder engagement 19, 58-60
102-44 Key topics and concerns raised 58-60
Reporting practice 102-45 Entities included in the consolidated Annual Report 2019 pg. 137-141 financial statements 102-46 Defining report content and topic 58-61 Boundaries 102-47 List of material topics 58
102-48 Restatements of information 79-80, 84, 86-87, 91-99
102-49 Changes in reporting No significant changes.
102-50 Reporting period 2
102-51 Date of most recent report 2018
102-52 Reporting cycle Annual 102-53 Contact point for questions regarding the 2 report 102-54 Claims of reporting in accordance with the 2 GRI Standards 102-55 GRI content index 62-73
102-56 External assurance This report has not been assured by a third party.
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GRI Standard Disclosure Page number(s) Material Topics
GRI 200 Economic Standard Series
Economic Performance GRI 103: 103-2 The management approach and its Annual Report 2019 pg.30-31 Management components Approach 2016 103-3 Evaluation of the management approach Annual Report 2019 pg. 32-33 GRI 201: 201-1 Direct economic value generated and Annual Report 2019 pg. 132-136 Economic distributed Performance 2016 201-2 Financial implications and other risks and 37-39 opportunities due to climate change 201-3 Defined benefit plan obligations and other Annual Report 2019 pg. 154-155 retirement plans 201-4 Financial assistance received from SAR 459.4 million total: SAR 427.8 million from government government subsidies for feed stock and SAR 31.6 million from the Human Resource Development Fund. Market Presence GRI 103: 103-1 Explanation of the material topic and its 26-28, 61 Management Boundary Approach 2016 103-2 The management approach and its 26-28 components 103-3 Evaluation of the management approach 26-28 GRI 202: 202-2 Proportion of senior management hired from Market Presence 91 the local community 2016 Indirect Economic Impacts GRI 103: 103-1 Explanation of the material topic and its 26-30, 41-42, 52-53, 55, 61 Management Boundary Approach 2016 103-2 The management approach and its 26-30, 41-42, 52-53, 55 components 103-3 Evaluation of the management approach 26-30, 41-42, 52-53, 55 203-1 Infrastructure investments and services GRI 203: Zero supported Indirect Economic Impacts 2016 203-2 Significant indirect economic impacts 42, 91-93
Procurement Practices GRI 103: 103-1 Explanation of the material topic and its 50, 61 Management Boundary Approach 2016 103-2 The management approach and its 50 components 103-3 Evaluation of the management approach 50 GRI 204: 204-1 Proportion of spending on local suppliers 102 Procurement Practices 2016
64 Almarai Sustainability Report 2019 GRI Standard Disclosure Page number(s) Anti-corruption GRI 103: 103-2 The management approach and its Almarai has a Policy for Reporting Violations, Management components which is designed to help stakeholders (including Approach 2016 employees, suppliers and third parties) to report any acts or practices which violate the Almarai Code of Conduct (CoC), laws, rules and regulations. Almarai has an electronic form to disclose any conflict of interest and the form has been shared twice with all Almarai’s employees that have emails in 2019. In line with the above, Almarai has a model for ethics and compliance reporting and resolution duly approved by the Senior Management and the Audit Committee. The ethics and compliance model is also supported by a reporting website, NAVEX EthicsPoint, which is linked directly to Almarai’s corporate website. Employees, customers, any concerned third parties, essentially anyone, can use the website and report violations safely and anonymously. A stand-alone policy on anti-bribery and corruption policy with procedures is under development and set to be introduced along with employee training in 2020. 103-3 Evaluation of the management approach Annual Report 2019 pg. 21 and 42-47 GRI 205: 205-1 Operations assessed for risks related to Assessment of risks is regularly carried out by Anti-corruption 2016 corruption our Internal Audit and Risk functions. At least two assessments took place in 2019. One related to supplier contract and the second was related to sales. 205-2 Communication and training about In 2019, Almarai introduced an updated version of its anti-corruption policies and procedures CoC, which was communicated to all employees, is available on Almarai’s Intranet, and will form part of all new employee on-boarding. In addition, a digital course on the CoC is under development. Anti-competitive Behavior GRI 103: 103-2 The management approach and its Annual Report 2019 pg. 42-47 Management components Approach 2016 103-3 Evaluation of the management approach Annual Report 2019 pg. 42-47 GRI 206: 206-1 Legal actions for anti-competitive behavior, Zero Anti-competitive anti-trust, and monopoly practices Behavior 2016
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GRI Standard Disclosure Page number(s)
GRI 300 Environmental Standards Series
Materials GRI 103: 103-1 Explanation of the material topic and its 36, 61 Management Boundary Approach 2016 103-2 The management approach and its 36 components 103-3 Evaluation of the management approach 36
GRI 301: 301-2 Recycled input materials used 94 Materials 2016 301-3 Reclaimed products and their packaging No reclaimed products are used to produce our materials products. Energy GRI 103: 103-1 Explanation of the material topic and its 37-39, 61 Management Boundary Approach 2016 103-2 The management approach and its 37-39 components 103-3 Evaluation of the management approach 37-39
GRI 302: 302-1 Energy consumption within the organization 95-97 Energy 2016 302-2 Energy consumption outside of the 95-97 organization 302-3 Energy intensity 96
302-4 Reduction of energy consumption 38-39
Water and Effluents
GRI 103: 303-1 Interactions with water as a shared resource 35 Management 303-2 Management of water discharge-related Approach 2018 35 impacts GRI 303: 303-3 Water withdrawal 35, 93 Water and Effluents 2018 303-4 Water discharge 35, 94
303-5 Water consumption 35, 93
Biodiversity GRI 103: 103-1 Explanation of the material topic and its 41, 61 Management Boundary Approach 2016 103-2 The management approach and its 41 components 103-3 Evaluation of the management approach 41 GRI 304: 304-1 Operational sites owned, leased, managed Zero to our knowledge. Biodiversity 2016 in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas 304-2 Significant impacts of activities, products, Zero to our knowledge. and services on biodiversity 304-3 Habitats protected or restored Zero to our knowledge. 304-4 IUCN Red List species and national conservation list species with habitats in areas Zero to our knowledge. affected by operations
66 Almarai Sustainability Report 2019 GRI Standard Disclosure Page number(s)
Emissions GRI 103: 103-1 Explanation of the material topic and its 37-39, 61 Management Boundary Approach 2016 103-2 The management approach and its 37-39 components 103-3 Evaluation of the management approach 37-39
GRI 305: 305-1 Direct (Scope 1) GHG emissions 96 Emissions 2016 305-2 Energy indirect (Scope 2) GHG emissions 97
305-3 Other indirect (Scope 3) GHG emissions 97
305-4 GHG emissions intensity 97 305-6 Emissions of ozone-depleting substances 97 (ODS) Effluents and Waste GRI 103: 103-1 Explanation of the material topic and its 35, 40, 61 Management Boundary Approach 2016 103-2 The management approach and its 35, 40 components 103-3 Evaluation of the management approach 35, 40
GRI 306: 306-1 Water discharge by quality and destination 94 Effluents and Waste 2016 306-2 Waste by type and disposal method 98
306-3 Significant spills Zero to our knowledge. 306-4 Transport of hazardous waste Any waste classified by local regulations as hazardous is transported from sites by authorized third-parties. 306-5 Water bodies affected by water discharges Zero to our knowledge. and/or runoff Environmental Compliance GRI 103: 103-1 Explanation of the material topic and its Annual Report 2019 pg. 42-47; 18, 41, 52, 54 and 61 Management Boundary of this report Approach 2016 103-2 The management approach and its Annual Report 2019 pg. 42-47; 18, 41, 52 and 54 components of this report Annual Report 2019 pg. 42-47; 18, 41, 52 and 54 103-3 Evaluation of the management approach of this report GRI 307: 307-1 Non-compliance with environmental One incident in Egypt related to the installation Environmental laws and regulations and commissioning of the water treatment plant. Compliance 2016 Corrective actions were taken to renew permit and the issue was resolved with no fines incurred.
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GRI Standard Disclosure Page number(s) Supplier Environmental Assessment GRI 103: 103-1 Explanation of the material topic and its 50, 61 Management Boundary Approach 2016 103-2 The management approach and its 50 components 103-3 Evaluation of the management approach 50 GRI 308: 308-1 New suppliers that were screened using 103 Supplier environmental criteria Environmental 308-2 Negative environmental impacts in the supply 103 Assessment 2016 chain and actions taken GRI 400 Social Standards Series
Employment GRI 103: 103-1 Explanation of the material topic and its 26-28, 61 Management Boundary Approach 2016 103-2 The management approach and its 26-28 components 103-3 Evaluation of the management approach 26-28
GRI 401: 401-1 New employee hires and employee turnover 84-87 Employment 2016 401-2 Benefits provided to full-time employees All employees are entitled to benefits, such as that are not provided to temporary or part-time medical insurance (life assurance is provided for employees senior management), annual leave, and full-time employees receive housing or a housing allowance and transportation. 401-3 Parental leave 90-91
Labor/Management Relations GRI 103: 103-1 Explanation of the material topic and its 26-28, 61 Management Boundary Approach 2016 103-2 The management approach and its 26-28 components 103-3 Evaluation of the management approach 26-28 GRI 402: 402-1 Minimum notice periods regarding We do not have a minimum notice period by which Labor/Management operational changes we must communicate operational changes ahead Relations 2016 of time.
68 Almarai Sustainability Report 2019 GRI Standard Disclosure Page number(s) Occupational Health and Safety GRI 103: 403-1 Occupational health and safety management 24-25 Management system Approach 2018 403-2 Hazard identification, risk assessment, and 24-25 incident investigation 403-3 Occupational health services 24-25 403-4 Worker participation, consultation, and 24-25 communication on occupational health and safety 403-5 Worker training on occupational health and 24-25, 78-79 safety 403-6 Promotion of worker health 24-25 403-7 Prevention and mitigation of occupational 24-25 health and safety impacts directly linked by business relationships GRI 403: 403-9 Work-related injuries 78 Occupational Health and Safety 2018 Training and Education GRI 103: 103-1 Explanation of the material topic and its 26-28, 61 Management Boundary Approach 2016 103-2 The management approach and its Annual Report 2019 pg. 56; 26-28 of this report components 103-3 Evaluation of the management approach Annual Report 2019 pg. 56; 26-28 of this report GRI 404: 404-1 Average hours of training per year per 91 Training and employee Education 2016 404-2 Programs for upgrading employee skills and We do not currently have any transition assistance transition assistance programs programs. Common practice within our GCC operations is to train and redeploy workers within the business. 404-3 Percentage of employees receiving regular 100%, excluding USA and Argentina performance and career development reviews (data not available) Diversity and Equal Opportunity GRI 103: 103-1 Explanation of the material topic and its 26-28, 61 Management Boundary Approach 2016 103-2 The management approach and its 26-28 components 103-3 Evaluation of the management approach 26-28 GRI 405: 405-1 Diversity of governance bodies and Diversity and Equal employees 87-89 Opportunity 2016 Non-discrimination GRI 103: 103-1 Explanation of the material topic and its 26-28, 61 Management Boundary Approach 2016 103-2 The management approach and its 26-28 components 103-3 Evaluation of the management approach 26-28 GRI 406: 406-1 Incidents of discrimination and corrective Non-discrimination 89 actions taken 2016
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GRI Standard Disclosure Page number(s) Freedom of Association and Collective Bargaining GRI 103: 103-1 Explanation of the material topic and its 50, 61 Management Boundary Approach 2016 103-2 The management approach and its Annual Report 2019 pg. 42-47; 50 of this report components 103-3 Evaluation of the management approach Annual Report 2019 pg. 42-47; 50 of this report GRI 407: 407-1 Operations and suppliers in which the right to Trade unions are not allowed in the GCC. Freedom of freedom of association and collective bargaining Employees in Argentina are represented by trade Association may be at risk unions. Employees in the USA, Jordan and Egypt and Collective are not members of trade unions. No information is Bargaining 2016 available for suppliers. Child Labor GRI 103: 103-1 Explanation of the material topic and its 50, 61 Management Boundary Approach 2016 103-2 The management approach and its Annual Report 2019 pg. 42-47; 50 of this report components 103-3 Evaluation of the management approach Annual Report 2019 pg. 42-47 GRI 408: Child 408-1 Operations and suppliers at significant risk To our knowledge our operations face no significant Labor 2016 for incidents of child labor risk for incidents of child labor. No information is available for suppliers. Forced or Compulsory Labor GRI 103: 103-1 Explanation of the material topic and its 50, 61 Management Boundary Approach 2016 103-2 The management approach and its Annual Report 2019 pg. 42-47; 50 of this report components 103-3 Evaluation of the management approach Annual Report 2019 pg. 42-47; 50 of this report GRI 409: Forced or 409-1 Operations and suppliers at significant risk To our knowledge our operations face no significant Compulsory Labor for incidents of forced or compulsory labor risk for incidents of forced or compulsory labor. No 2016 information is available for suppliers. Security Practices GRI 103: 103-1 Explanation of the material topic and its 24-25, 61 Management Boundary Approach 2016 103-2 The management approach and its Annual Report 2019 pg. 42-47; 24-25 of this report components 103-3 Evaluation of the management approach Annual Report 2019 pg. 42-47;24-25 of this report GRI 410: 410-1 Security personnel trained in human rights All security guards in our GCC operations receive Security Practices policies or procedures our standard manned guarding course. This course 2016 covers effective conflict management proportionate to the risk level as identified by the High Commission for Industrial Safety of the Ministry of Interior in Saudi Arabia. No information available for Jordan, Egypt, USA or Argentina.
70 Almarai Sustainability Report 2019 GRI Standard Disclosure Page number(s) Rights of Indigenous Peoples GRI 103: 103-1 Explanation of the material topic and its 50, 61 Management Boundary Approach 2016 103-2 The management approach and its Annual Report 2019 pg. 42-47; 50 of this report components 103-3 Evaluation of the management approach Annual Report 2019 pg. 42-47; 50 of this report GRI 411: 411-1 Incidents of violations involving rights of Zero Rights of indigenous peoples Indigenous Peoples 2016 Human Rights Assessment GRI 103: 103-1 Explanation of the material topic and its 50, 61 Management Boundary Approach 2016 103-2 The management approach and its Annual Report 2019 pg. 42-47, 50 of this report components 103-3 Evaluation of the management approach Annual Report 2019 pg. 42-47, 50 of this report GRI 412: 412-1 Operations that have been subject to human Zero to our knowledge. Human Rights rights reviews or impact assessments Assessment 2016 412-2 Employee training on human rights policies Zero or procedures 412-3 Significant investment agreements and Zero contracts that include human rights clauses or that underwent human rights screening Local Communities GRI 103: 103-1 Explanation of the material topic and its 29, 52-53, 55, 61 Management Boundary Approach 2016 103-2 The management approach and its 29, 52-53, 55 components 103-3 Evaluation of the management approach 29, 52-53, 55 GRI 413: 413-1 Operations with local community 29-30, 52-53, 55 Local Communities engagement, impact assessments, and 2016 development programs 413-2 Operations with significant actual and Throughout our operations, we recognize that these potential negative impacts on local communities operations could pose a potential negative impact on surrounding communities. Supplier Social Assessment GRI 103: 103-1 Explanation of the material topic and its 50, 61 Management Boundary Approach 2016 103-2 The management approach and its Annual Report 2019 pg. 42-47; 50 of this report components 103-3 Evaluation of the management approach 50 GRI 414: 414-1 New suppliers that were screened using 103 Supplier Social social criteria Assessment 2016 414-2 Negative social impacts in the supply chain 103 and actions taken
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GRI Standard Disclosure Page number(s) Customer Health and Safety GRI 103: 103-1 Explanation of the material topic and its 47-48, 61 Management Boundary Approach 2016 103-2 The management approach and its 47-48 components 103-3 Evaluation of the management approach 47-48, 53, 55, 99-101 GRI 416: 416-1 Assessment of the health and safety impacts 100 Customer Health of product and service categories and Safety 2016 Marketing and Labeling GRI 103: 103-1 Explanation of the material topic and its 23-24, 61 Management Boundary Approach 2016 103-2 The management approach and its 23-24 components 103-3 Evaluation of the management approach 23-24, 77 GRI 417: 417-1 Requirements for product and service 23-24, 77 Marketing and information and labeling Labeling 2016 417-2 Incidents of non-compliance concerning One incident in the GCC related to artwork product and service information and labeling compliance with the Saudi Food and Drug Authority specifications. Corrective actions were taken, and financial penalties were paid to the amount of SAR 25,000.
25 incidents in Egypt related to on pack communication compliance with a new Egyptian Standards Specification. The company worked with the authorities on the corrective actions and the necessary revisions were implemented. Financial penalties were paid to the amount of EGP 62,000. 417-3 Incidents of non-compliance concerning 77 marketing communications Customer Privacy GRI 103: 103-2 The management approach and its Annual Report 2019 pg. 42-47 Management components Approach 2016 103-3 Evaluation of the management approach Annual Report 2019 pg. 42-47 GRI 418: 418-1 Substantiated complaints concerning Zero Customer Privacy breaches of customer privacy and losses of 2016 customer data Socioeconomic Compliance GRI 103: 103-2 The management approach and its Annual Report 2019 pg. 42-47 Management components Approach 2016 103-3 Evaluation of the management approach Annual Report 2019 pg. 42-47 GRI 419: 419-1 Non-compliance with laws and regulations in Zero to our knowledge. Socioeconomic the social and economic area Compliance 2016
72 Almarai Sustainability Report 2019 GRI Standard Disclosure Page number(s) Sector Specific Disclosures – Food Processing
Procurement/Sourcing Practices GRI 103: 103-1 Explanation of the material topic and its 50, 61 Management Boundary Approach 2016 103-2 The management approach and its 50 components 103-3 Evaluation of the management approach 50, 102-103 Procurement/ FP1 Percentage of purchased volume from 103 Sourcing Practices suppliers compliant with company's sourcing policy FP2 Percentage of purchased volume which is 103 verified as being in accordance with credible, internationally recognized responsible production standards Labor/Management Relation GRI 103: 103-1 Explanation of the material topic and its 26-28, 61 Management Boundary Approach 2016 103-2 The management approach and its 26-28 components 103-3 Evaluation of the management approach 26-28 Labor/Management FP3 Percentage of working time lost due to Zero Relation industrial disputes, strikes and/or lock-outs Customer Health and Safety GRI 103: 103-1 Explanation of the material topic and its 23-24, 47-48, 61 Management Boundary Approach 2016 103-2 The management approach and its 23-24, 47-48 components 103-3 Evaluation of the management approach 23-24, 47-48, 53, 55, 99-101 Customer Health FP5 Percentage of production volume 99 and Safety manufactured in sites certified by an independent third party according to internationally recognized food safety management system standards Animal Welfare GRI 103: 103-1 Explanation of the material topic and its 49, 61 Management Boundary Approach 2016 103-2 The management approach and its 49 components 103-3 Evaluation of the management approach 49 Animal Welfare FP9 Percentage and total of animals raised and/or 101 processed, by breed type FP10 Percentage and total animals raised and/or 101-102 processed, per housing type FP 12 Policies and practices on antibiotic, anti-inflammatory, hormone, and/or growth 49, 101 promotion treatments, by species and breed type FP 13 Total number of incidents of significant 101 non-compliance with laws and regulations, and adherence with voluntary standards related to transportation, handling, and slaughter practices for live terrestrial and aquatic animals
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Appendix E Sustainability strategy boundaries
The scope of Almarai’s sustainability strategy covers Almarai’s GCC owned operations, excluding our subsidiaries Beyti and Teeba, as well as Premier Foods and Pure Breeds unless otherwise stated within the specific target or below.
Targets Scope exceptions Reduce waste going to landfill across all our divisions by 50% This does not include animal manure. by 2025 (against a 2018 baseline)
Enhance sustainable practices on our arable farms by 2025 This includes Fondomonte USA and Argentina only.
All manufacturing sites will be Global Food Safety Initiative This includes Premier Foods, IDJ and co-manufacturing. (GFSI) certified by 2025 All high-risk ingredient suppliers will be Global Food Safety This includes Premier Foods and IDJ. Initiative (GFSI) certified by 2025
Appendix F Alignment to NTP
Material issue Relevant NTP strategic objectives
Caring for people
Nutrition and wellbeing 2.1.3
Health and safety 2.1.1 | 2.1.3 | 2.3.4
Employee talent and diversity 4.2.2 | 4.4.2 | 4.4.3
Community investment 2.1.3 | 6.2.1
Protecting the planet
Packaging innovation N/A
Climate change N/A
Water management 5.4.2
Waste management 2.4.1
Sustainable agriculture N/A
Producing responsible products
Quality and food safety 5.4.1
Animal welfare N/A
Ethical sourcing 3.1.6 | 3.3.5
74 Almarai Sustainability Report 2019 NTP 37 strategic objectives mapped into the eight themes:
Ensure the Improve Living Transform Healthcare Sustainability of Standards and Safety Vital Resources
2.1.1 Ease Access to Health Services 2.3.1 Improve the Quality of Services 2.4.2 Provide Environmental Protection Provided in Saudi Cities from Natural Hazards 2.1.2 Improve the Quality and Efficiency 2.3.2 Improve the Urban Landscape 2.4.3 of Healthcare Services in Saudi Cities Protect and Rehabilitate Natural Landscapes 2.1.3 2.3.4 Enhance Traffic Safety Promote Prevention Against 5.4.1 Ensure Development and Food Health Risks 2.4.1 Reduce All Types of Pollution Security 5.4.2 Ensure Sustainable Access to Improve the Living 4.4.1 Water Resources Conditions of Expatriates
Social Empowerment Achieve Labor Market and Non-Profit Sector Governmental Accessibility and Development Operational Excellence Attractiveness
2.6.4 Empower Citizens Through the 5.2.3 Improve the Productivity 4.2.2 Increase Women’s Participation Welfare and Social Development of Government Employees in the Labor Market System 5.2.4 Develop e-Government 2.6.5 Improve Effectiveness and Efficiency 4.2.3 Enable Integration of People with 5.2.5 Improve the Quality of Services of Welfare and Social Development Disabilities in the Labor Market Provided to Citizens System 4.4.2 Improve Working 6.1.2 Encourage Volunteering 5.3.1 Enhance Transparency Across Conditions for Expatriates 4.4.3 6.2.1 Enhance Business Focus on Government Entities Effectively Attract Suitable Global Talent their Social Responsibilities 5.3.2 Support Communication Channels 6.3.1 Support Non-profit Sector Growth with Citizens and Businesses 6.3.2 Enable Non-Profit Organizations 5.3.3 Ensure Government Entities ’ to Achieve Greater Impact Response to Customers’ Feedback
Contribute in Develop the Tourism Enabling the and National Heritage Private Sector Sectors
3.1.1 Facilitate Doing Business 1.3.2 Conserve & Promote the Kingdom’s Islamic, Arab , 3.1.6 Attract Foreign Direct Investment and National Heritage (FDI) 3.3.6 Develop the Tourism Sector 3.3.2 Develop the Digital Economy 3.3.5 Develop the Retail Sector 4.3.2 Increase the Contribution of Small- and Medium-size Enterprises (SMEs) to the Economy 4.3.3 Increase the Contribution of Productive Households to the Economy 6.2.2 Encourage Businesses’ Interest in Sustaining the National Economy
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Appendix G Alignment to SDGs
Material issue Relevant SDG targets
Caring for people
Nutrition and wellbeing 2.2 | 3.4 | 17.16 | 17.17
Health and safety 3.4 | 3.6 | 8.8
Employee talent and diversity 5.1
Community investment 1.2 | 2.1 | 2.2 | 4.3 | 17.17
Protecting the planet
Packaging innovation 12.2 | 14.1
Climate change 7.2 | 7.3 | 9.4 | 13.1
Water management 6.3 | 6.4 | 6.5 | 6.6 | 17.16 | 17.17
Waste management 12.3 | 12.4 | 12.5 1.2 | 2.3 | 2.4 | 6.3 | 6.4 | 6.5 | 6.6 | 8.7 | 8.8 | 12.2 | 12.4 | 15.1 | 15.3 | 15.5 | 15.A | Sustainable agriculture 15.B | 17.16 Producing responsible products
Quality and food safety 3.9
Animal welfare 17.16
Ethical sourcing 1.2 | 6.3 | 6.4 | 6.5 | 6.6 | 8.7 | 8.8 | 12.2 | 12.4 | 12.7 | 15.1 | 15.3 | 15.5 | 15. A | 15.B
76 Almarai Sustainability Report 2019 Appendix H Sustainability in numbers
Our sustainability performance 2018 2019 Managing sustainability at Almarai
Number of incidents of non-compliance with environmental laws and regulations 1 1
GCC 0 0
Egypt 1 1
Jordan 0 0
USA 0 0
Argentina 0 0
Nutrition and wellbeing
Number of incidents of non-compliance concerning product information and labeling 1 26
GCC 0 1
Egypt 1 25
Jordan 0 0
USA N/A N/A
Argentina N/A N/A Number of incidents of non-compliance with regulations and/or voluntary codes 0 0 concerning marketing communications GCC 0 0
Egypt 0 0
Jordan 0 0
USA N/A N/A
Argentina N/A N/A Percentage of significant product categories covered by and assessed for compliance 100% 100% with product information and labeling procedures (%) GCC 100% 100%
Egypt 100% 100%
Jordan 100% 100%
USA N/A N/A
Argentina N/A N/A
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Our sustainability performance 2018 2019 Health and safety
Number of employee lost time injuries 283 248
GCC 256 195
Egypt 4 7
Jordan 23 15
USA NIA 14
Argentina NIA 17
Contractor lost-time injuries 0 3
GCC NIA NIA
Egypt 0 0
Jordan 0 0
USA NIA 3
Argentina NIA 0
Employee rate of lost-time injury (per 1 million man-hours)
GCC 1.72 1.87
Egypt 2.16 3.20
Jordan 9.48 7.06
USA NIA NIA
Argentina NIA 29.71
Contractor lost-time injury rate (per 1 million man-hours)
GCC NIA NIA
Egypt 0 0
Jordan 0 0
USA NIA NIA
Argentina NIA 0
Hours of employee health and safety training 165,430 375,932
GCC 155,320 352,338
Egypt 9,603 11,058
Jordan 507 883
USA NIA 11,544
Argentina NIA 109
78 Almarai Sustainability Report 2019 Our sustainability performance 2018 2019 Hours of contractor health and safety training 5,446 7,351
GCC NIA 1,289
Egypt 5,396 4,215
Jordan 50 100
USA NIA 1,711
Argentina NIA 36
Average hours of health and safety training per employee 3.9 9.2
GCC 4.0 9.7
Egypt 3.0 3.4
Jordan1 0.8 1.1
USA NIA 38.1
Argentina NIA 0.8
Average hours of health and safety training per contractor 6.1 4.5
GCC NIA 2.1
Egypt 10.6 4.8
Jordan 1.7 1.7
USA NIA 37.2
Argentina NIA 1.0
Employee absenteeism rate (%)
GCC 6.5% 4.9%
Egypt 1.7% 1.9%
Jordan <1% <1%
USA NIA NIA
Argentina NIA 5.0%
Employee talent and diversity
Number of employees 42,971 41,884
GCC 38,416 37,231
Egypt 3,181 3,265
Jordan 837 798
USA 2 366 389
Argentina 171 201
1 2018 figure has been restated. 2 Fondomonte USA employed 80 seasonal employees in 2019.
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Our sustainability performance 2018 2019 Male employees3 42,086 40,869
GCC 37,666 36,462
Egypt 3,138 3,224
Jordan 816 775
USA 324 248
Argentina 142 160
Female employees4 885 929
GCC 750 769
Egypt 43 41
Jordan 21 23
USA 42 55
Argentina 29 41
Employees by location 42,971 41,884
GCC 38,416 37,231
Egypt 3,181 3,265
Jordan 837 798
USA 366 389
Argentina 171 201
Full time, male employees 42,064 40,859
GCC 37,662 36,456
Egypt 3,138 3,224
Jordan 816 775
USA 306 245
Argentina 142 159
Full time, female employees 885 928
GCC 750 769
Egypt 43 40
Jordan 21 23
USA 42 55
Argentina 29 41
3 2018 figures for USA and Argentina have been restated. 4 2018 figures for USA and Argentina have been restated.
80 Almarai Sustainability Report 2019 Our sustainability performance 2018 2019 Part time, male employees 22 10
GCC 4 6
Egypt 0 0
Jordan 0 0
USA 18 3
Argentina 0 1
Part time, female employees 0 1
GCC 0 0
Egypt 0 1
Jordan 0 0
USA 0 0
Argentina 0 0
Senior management employees 287 310
GCC 243 248
Egypt 22 24
Jordan 22 15
USA NIA 8
Argentina NIA 15
Middle management employees 1,507 1,484
GCC 1,272 1,266
Egypt 136 151
Jordan 99 14
USA NIA 31
Argentina NIA 22
Non-management employees 40,576 40,089
GCC 36,901 35,717
Egypt 2,959 3,090
Jordan 716 769
USA NIA 350
Argentina NIA 163
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Our sustainability performance 2018 2019 New employee hires 7,270 6,065
GCC 6,693 4,964
Egypt 563 730
Jordan 14 19
USA NIA 281
Argentina NIA 71
New employee hires, age 18-30 5,029 4,017
69.2% 66.2%
GCC 4,677 3,320
69.9% 66.9%
Egypt 343 505
60.9% 69.2%
Jordan 9 14
64.3% 73.7%
USA NIA 150
NIA 53.4%
Argentina NIA 28
NIA 39.4%
New employee hires, age 31-50 2,228 1,986
30.6% 32.7%
GCC 2,003 1,617
29.9% 32.6%
Egypt 220 220
39.1% 30.1%
Jordan 5 5
35.7% 26.3%
USA NIA 101
NIA 35.9%
Argentina NIA 43
NIA 60.6%
82 Almarai Sustainability Report 2019 Our sustainability performance 2018 2019 New employee hires, age 51+ 13 62
0.2% 1.0%
GCC 13 27
0.2% 0.5%
Egypt 0 5
0% 0.7%
Jordan 0 0
0% 0%
USA NIA 30
NIA 10.7%
Argentina NIA 0
NIA 0%
New employee hires, male 7,110 5,835
97.8% 96.2%
GCC 6,542 4,786
97.7% 96.4%
Egypt 554 723
98.4% 99.0%
Jordan 14 14
100% 74%
USA NIA 258
NIA 91.8%
Argentina NIA 54
NIA 76.1%
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Our sustainability performance 2018 2019 New employee hires, female 160 225
2.2% 3.7%
GCC 151 178
2.3% 3.6%
Egypt 9 7
1.6% 1.0%
Jordan 0 0
0% 0%
USA NIA 23
NIA 8.2%
Argentina NIA 17
NIA 23.9%
5 Voluntary employee turnover 5,221 4,885
12.3% 11.7%
GCC 4,360 3,999
11.3% 10.7%
Egypt 684 661
21.5% 20.2%
Jordan 177 9
21.1% 1.1%
USA NIA 200
NIA 51.4%
Argentina NIA 16
NIA 8.0%
5 2018 percentage has been restated.
84 Almarai Sustainability Report 2019 Our sustainability performance 2018 2019 Voluntary employee turnover, age 18-30 2,321 2,190
44.5% 44.8%
GCC 1,890 1,708
43.3% 42.7%
Egypt 297 363
43.4% 54.9%
Jordan 134 3
75.7% 33.3%
USA NIA 112
NIA 56.0%
Argentina NIA 4
NIA 25.0%
Voluntary employee turnover, age 31-50 2,728 2,471
52.3% 50.6%
GCC 2,326 2,098
53.3% 52.5%
Egypt 362 293
52.9% 44.3%
Jordan 40 5
22.6% 55.6%
USA NIA 63
NIA 31.5%
Argentina NIA 12
NIA 75%
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Our sustainability performance 2018 2019 Voluntary employee turnover, age 51+ 345 224
6.6% 4.6%
GCC 144 193
3.3% 4.8%
6 Egypt 25 5
3.7% 0.8%
Jordan 176 1
99.4% 11.1%
USA NIA 25
NIA 12.5%
Argentina NIA 0
NIA 0%
Voluntary employee turnover, male 5,120 4,731
98.1% 96.8%
GCC 4,270 3,871
97.9% 96.8%
Egypt 674 654
98.5% 98.9%
Jordan 176 9
99.4% 100%
USA NIA 185
NIA 93%
Argentina NIA 12
NIA 75.0%
6 2018 percentage has been restated.
86 Almarai Sustainability Report 2019 Our sustainability performance 2018 2019 Voluntary employee turnover, female 101 154
1.9% 3.2%
GCC 90 128
2.1% 3.2%
Egypt 10 7
1.5% 1.1%
Jordan 1 0
0.6% 0%
USA NIA 15
NIA 8%
Argentina NIA 4
NIA 25.0%
Female employment rate (%)7 2.1% 2.2%
GCC 2.0% 2.1%
Egypt 1.4% 1.3%
Jordan 2.6% 3.0%
USA 11.5% 14.1%
Argentina 17.0% 20.4%
Women in senior management 10 11
3.5% 3.5%
GCC 2 2
0.8% 0.8%
Egypt 6 6
27.3% 25.0%
Jordan 2 1
9.1% 6.7%
USA NIA 0
NIA 0%
Argentina NIA 2
NIA 13.3%
7 2018 figures have been restated for Jordan, USA and Argentina.
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Our sustainability performance 2018 2019 Women in middle management 71 65
4.7% 4.4%
GCC 45 31
3.5% 2.4%
Egypt 18 18
13.2% 11.9%
Jordan 8 4
8.1% 28.6%
USA NIA 8
NIA 25.8%
Argentina NIA 4
NIA 18.2%
Women in non-management positions 733 849
1.8% 2.1%
GCC 703 736
1.9% 2.1%
Egypt 19 19
0.6% 0.6%
Jordan 11 17
1.5% 2.2%
USA NIA 42
NIA 12.0%
Argentina NIA 35
NIA 21.5%
88 Almarai Sustainability Report 2019 Our sustainability performance 2018 2019 Board seats occupied by women 0 2
0% 22.2%
GCC 0 0
0% 0%
Egypt 0 0
0% 0%
Jordan 0 1
0% 12.5%
USA NIA 0
NIA 0%
Argentina NIA 1
NIA 20.0%
Number of employees with a disability 540 508
GCC 468 436
Egypt 55 55
Jordan 17 17
USA NIA 0
Argentina NIA 0
Number of formal incidents of discrimination reported 0 0
GCC 0 0
Egypt 0 0
Jordan 0 0
USA NIA 0
Argentina NIA 0
Percentage of working time lost due to industrial disputes, strikes and/or lock-outs (%)
GCC 0% 0%
Egypt 0% 0%
Jordan <1% 0%
USA NIA 0%
Argentina NIA 0%
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Our sustainability performance 2018 2019 Number of female employees entitled to maternity leave 344 425
GCC 327 333
Egypt 2 4
Jordan 15 11
USA NIA 38
Argentina NIA 39
Number of female employees that took parental leave 48 46
GCC 44 38
Egypt 2 4
Jordan 2 0
USA NIA 2
Argentina NIA 2 Number of female employees that returned to work in the reporting period after 42 37 parental leave ended GCC 39 30
Egypt 1 3
Jordan 2 0
USA NIA 2
Argentina NIA 2 Number of female employees that returned to work after parental leave ended that 41 33 were still employed 12 months after their return to work GCC 39 30
Egypt 0 1
Jordan 2 0
USA NIA 1
Argentina NIA 1
Female employee return to work rate of employees that took parental leave (%) 88% 80%
GCC 89% 79%
Egypt 50% 75%
Jordan 100% N/A
USA NIA 100%
Argentina NIA 100%
90 Almarai Sustainability Report 2019 Our sustainability performance 2018 2019 Female employee retention rate of employees that took parental leave (%) 85% 72%
GCC 89% 79%
Egypt 0% 25%
Jordan 100% N/A
USA NIA 50%
Argentina NIA 50%
Total hours of training provided 405,559 630,551
GCC 375,258 579,152
Egypt 28,701 37,230
Jordan 1,600 4,956
USA NIA 8,346
Argentina NIA 867
Average hours of training per employee8 9.4 15.1
GCC 9.8 15.6
Egypt 9.0 11.4
Jordan 1.9 6.2
USA NIA 21.5
Argentina NIA 4.3
Learning and development programs - GCC only 933 1,949
Number of Almarai Academy participants (National and non-national) 520 565
Number of Almarai Driving School participants (National and non-national) 413 1,384
Saudization - GCC only
Number of Saudi employees 8,766 8,466
Percentage Saudization among total workforce 26% 26%
Percentage Saudization of middle management 25% 24%
Percentage Saudization of senior management 16% 17%
Number of Saudi female employees 645 635
Number of Saudi Almarai Academy participants 291 265
Number of Saudi Graduate Professional Trainee participants 22 23
Number of Saudi Almarai Future Leaders participants 21 0
Number of Saudi Dairy & Food Polytechnic participants 584 400
Number of Saudi Almarai Driving School participants 126 133
Total number of Saudi nationals in professional development programs 1,044 821
8 2018 figure has been restated.
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Our sustainability performance 2018 2019 Community investment9
Total CSR spending (SAR million) - GCC only 39.6 34.7
Total CSR spending as a percentage of net profit (%) - GCC only10 2.0% 1.9%
Product donations - GCC only
Number of schools provided with snacks for students 947 1,036
Snacks for school children (Number of servings) 853,242 880,228
Number of low-income families provided with food baskets 600 1,800
Number of charities provided with food donations 301 230
Product donations for charities (Number of servings) 216,612 239,616
Total product servings donated 1,069,854 1,119,844
Total financial value (SAR million) 0.9 1.0
Support for vulnerable groups - GCC only
Number of lower income couples provided with weddings 1,200 1,400
Number of children at orphanages and charities provided with Iftars 40 58 Charity, orphanage and other association event sponsorships 80 172 (Number of beneficiaries) Total financial value (SAR million) 0.4 0.5
Support for learning and technical, vocational and education training (TVET) - GCC only
Number of TVET beneficiaries (Dairy & Food Polytechnic) 505 486
University student groups sponsored (Number of beneficiaries) 70 340
Braille booklets (Number of books donated) N/A 500
Dental care campaign (Number of schools attended) 20 32
Almarai site visit program (Number of visitors) 73,286 88,030
Sponsorship of Food Loss and Waste Index and awareness campaign (value in SAR). N/A 100,000
Sponsorship of Qaderoon documentary (value in SAR) N/A 113,000
Total financial value (SAR million) 35.3 30.2
Sponsorship of awards - GCC only Number of award winners (Veterinarian Award, Scientific Innovation Award, Ideal Mother Award, Academic Excellence Award, Photography Award and 119 162 Sheikha Latifa Award) Total financial Value (SAR million) 3.0 3.0
CSR - Jordan
Total CSR spending (SAR) 7,613 10,129
Number of school and university visitors hosted N/A 438
Product donations (Number of servings) NIA 7,583
9 Figures for 2018 have been restated in some instances due to recategorization. 10 Based on profit attributable to Shareholders of the Group.
92 Almarai Sustainability Report 2019 Our sustainability performance 2018 2019 CSR - Egypt
Total CSR Spending (SAR) NIA 23,329
Number of school and university visitors hosted NIA 735
School bag donations (Number of bags donated to students) NIA 20,000
Hours of employee volunteering NIA 800
Water management11
Water withdrawal (m3)12 12,966,868 13,643,999
GCC 11,685,518 12,247,436
Egypt 1,117,040 1,221,571
Jordan 164,310 174,992
USA NIA NIA
Argentina NIA NIA
Water recycling and reuse (m3)13 1,751,894 1,859,214
GCC 1,643,355 1,665,798
Egypt 739 73,000
Jordan14 107,800 120,416
USA NIA NIA
Argentina NIA NIA
Percentage of water recycled and/or reused (%)15 13.5% 13.6%
GCC 14.1% 13.6%
Egypt 0.1% 6.0%
Jordan 65.6% 68.8%
USA NIA NIA
Argentina NIA NIA
Total water consumption (m3) 14,718,762 15,503,213
GCC 13,328,873 13,913,234
Egypt 1,117,779 1,294,571
Jordan 272,110 295,408
USA NIA NIA
Argentina NIA NIA
11 Water data excludes dairy, poultry and arable farming. 12 2018 figures for total, GCC and Jordan have been restated due to better data availability. Data is not available for Jordan sales depots. 2018 data not available for Egypt head office and sales depots. Water withdrawal refers to groundwater and purchased water. 13 2018 figures for total, GCC and Jordan have been restated due to better data availability. 14 Water is reused for irrigation. 15 2018 figures for total, GCC and Jordan have been restated due to better data availability.
www.almarai.com 93 Appendices / GRI Content Index
Our sustainability performance 2018 2019 Water discharge (m3)16 8,922,905 9,081,252
GCC 8,142,212 8,946,156
Egypt 657,706 NIA
Jordan 122,987 135,096
USA NIA NIA
Argentina NIA NIA
Manufacturing water intensity (m3/metric ton of finished product) 4.8 5.3
GCC17 5.0 5.5
Egypt 3.1 3.7
Jordan 6.0 6.3
USA N/A N/A
Argentina N/A N/A
Packaging innovation
Percentage of card board coming from recycled materials used as an input material (%)
GCC 65% 65%
Egypt NIA NIA
Jordan 57% 70%
USA N/A N/A
Argentina N/A N/A
Plastics removed from packaging (tons) 283 2,945
GCC 283 2,945
Egypt NIA NIA
Jordan NIA NIA
USA N/A N/A
Argentina N/A N/A
Paper removed from packaging (tons) 128 902
GCC 128 902
Egypt NIA NIA
Jordan NIA NIA
USA N/A N/A
Argentina N/A N/A
16 2018 figures for GCC and Jordan have been restated due to better data availability. Data is not available for GCC head offices and Egypt head office and sales depots. Water is discharged to land (lagoons), sewer, irrigation and/or canal. 17 2018 figure has been restated due to better data availability.
94 Almarai Sustainability Report 2019 Our sustainability performance 2018 2019 Total packaging removed from the consumer waste stream (tons) 411 3,847
GCC 411 3,847
Egypt NIA NIA
Jordan NIA NIA
USA N/A N/A
Argentina N/A N/A
Climate change18
Direct stationary energy usage (in thousands kWh) 863,669 892,896
GCC 801,850 836,570
Egypt 53,690 54,192
Jordan 8,105 2,127
USA 0 0
Argentina 24 7
Indirect stationary energy usage (in thousands kWh) 973,407 1,090,750
GCC 845,531 936,070
Egypt 53,079 66,436
Jordan 9,439 9,349
USA 55,359 67,300
Argentina 9,999 11,595
Total stationary energy usage (direct and indirect, in thousands kWh) 1,837,076 1,983,646
GCC 1,647,382 1,772,640
Egypt 106,768 120,627
Jordan 17,545 11,476
USA 55,359 67,300
Argentina 10,022 11,602
Solar energy usage (in thousand kWh) 2,421 22,393
GCC 2,421 22,095
Egypt 0 0
Jordan 0 298
USA 0 0
Argentina 0 0
18 Figures for 2018 have been restated in some instances due to better data availability and the use of updated emission factors.
www.almarai.com 95 Appendices / GRI Content Index
Our sustainability performance 2018 2019 Percentage of electricity consumption from solar (%) 0.2% 1.5%
GCC 0.2% 1.6%
Egypt 0% 0%
Jordan 0% 3.2%
USA 0% 0%
Argentina 0% 0%
Almarai owned refrigerators in stores (in thousands kWh) 906,305 961,093
GCC 906,305 961,093
Egypt NIA NIA
Jordan NIA NIA
USA NIA NIA
Argentina NIA NIA
Manufacturing energy intensity (kWh/metric ton of finished product) 478.7 521.7
GCC19 512.3 549.8
Egypt 283.1 365.9
Jordan 519.2 297.2
USA N/A N/A
Argentina N/A N/A
Total vehicle fuel consumption (thousands of liters) 427,402 366,362
GCC 410,512 357,485
Egypt 6,434 2,781
Jordan 1,983 215
USA 7,609 4,428
Argentina 864 1,454
20 Scope 1 (direct) emissions (metric tons CO2e) 1,151,718 1,032,452
GCC 1,113,639 1,005,862
Egypt 21,118 17,959
Jordan 5,744 858
USA 10,093 5,974
Argentina 1,125 1,800
19 2018 figure has been restated due to better data availability. 20 2018 figures have been restated due to better data availability and updating emission factors in certain cases.
96 Almarai Sustainability Report 2019 Our sustainability performance 2018 2019
21 Scope 2 (indirect) emissions (metric tons CO2e) 776,463 865,146
GCC 718,292 795,419
Egypt 23,188 29,022
Jordan 7,344 7,273
USA 23,721 28,886
Argentina 3,919 4,545
Scope 3 emissions from Almarai refrigerators in stores (metric tons CO2e) 780,088 827,246
GCC 780,088 827,246
Egypt NIA NIA
Jordan NIA NIA
USA NIA NIA
Argentina NIA NIA
22 Total emissions (metric tons CO2e) 2,708,270 2,724,844
GCC 2,612,019 2,628,528
Egypt 44,305 46,981
Jordan 13,088 8,131
USA 33,814 34,860
Argentina 5,044 6,344
Manufacturing emissions intensity (metric tons CO2e/metric ton of finished product) 0.27 0.29
GCC23 0.30 0.32
Egypt 0.10 0.13
Jordan 0.26 0.20
USA N/A N/A
Argentina N/A N/A
24 Emissions from refrigerant leakage and replacement (metric tons CO2e) 167,729 200,380
GCC 167,686 200,036
Egypt 23 286
Jordan 20 NIA
USA NIA NIA
Argentina NIA 58
21 2018 figures have been restated for GCC, Jordan and USA due to better data availability and updating emission factors in certain cases. 22 2018 figures have been restated due to better data availability and updating emission factors in certain cases. 23 2018 figure has been restated due to better data availability and updating emission factors in certain cases. 24 2018 figures for total, GCC and Egypt have been restated due to better data availability. No data available for in-store refrigerators, wall units or Jordan sales depots.
www.almarai.com 97 Appendices / GRI Content Index
Our sustainability performance 2018 2019 Waste management25
Food waste resold for animal feed (Store returns and operational) (metric tons) 32,375 40,086
GCC 32,375 40,086
Egypt 0 0
Jordan 0 0
USA N/A N/A
Argentina N/A N/A
Recycled waste (metric tons) 31,840 22,309
GCC 16,577 22,071
Egypt 15,040 NIA
Jordan 0 0
USA 183 178
Argentina 40 60
Total waste generated (metric tons) 216,172 209,439
GCC 184,512 202,738
Egypt 24,240 NIA
Jordan 7,420 6,701
USA NIA NIA
Argentina NIA NIA
Waste sent to landfill (metric tons) 152,574 152,887
GCC 135,954 141,292
Egypt26 9,200 4,894
Jordan 7,420 6,701
USA NIA NIA
Argentina NIA NIA
Percentage of waste sent to landfill (%) 71% 73%
GCC 74% 70%
Egypt 38% NIA
Jordan 100% 100%
USA NIA NIA
Argentina NIA NIA
25 2018 figures have been restated due to better data availability and/or recategorization. 26 No data available for Egypt head office and sales depots.
98 Almarai Sustainability Report 2019 Our sustainability performance 2018 2019 Sustainable agriculture
Number of incidents of non-compliance with environmental laws and regulations 0 0
USA 0 0
Argentina 0 0
Arable farming land under production (hectares) 32,154 32,367
USA 7,840 8,269
Argentina 24,314 24,098
Quality and food safety Percentage of production volume manufactured in sites certified by an independent third party according to internationally recognized food safety management system standard (%) GCC 100% 100%
Egypt27 85% 85%
Jordan 100% 100%
USA N/A N/A
Argentina N/A N/A Number of incidents of non-compliance with regulations and/or voluntary codes 0 0 concerning the health and safety impacts of products and services GCC 0 0
Egypt 0 0
Jordan 0 0
USA N/A N/A
Argentina N/A N/A
Number of recalls 0 0
GCC 0 0
Egypt 0 0
Jordan 0 0
USA N/A N/A
Argentina N/A N/A Percentage of significant product categories covered by and assessed for compliance 100% 100% with product information and labeling procedures (%) GCC 100% 100%
Egypt 100% 100%
Jordan 100% 100%
USA N/A N/A
Argentina N/A N/A
27 2018 figure has been restated.
www.almarai.com 99 Appendices / GRI Content Index
Our sustainability performance 2018 2019 Percentage of products for which health and safety impacts are assessed for 100% 100% improvement (%) GCC 100% 100%
Egypt 100% 100%
Jordan 100% 100%
USA N/A N/A
Argentina N/A N/A
Total number of manufacturing plants 12 13
GCC 10 10
Egypt 1 2
Jordan 1 1
USA N/A N/A
Argentina N/A N/A
Number of Food Safety System Certification (FSSC) 22000 certified plants 2 3
GCC 1 2
Egypt 1 1
Jordan 0 0
USA N/A N/A
Argentina N/A N/A
Number of Global Food Safety Initiative (GFSI) certified plants 2 3
GCC 1 2
Egypt 1 1
Jordan 0 0
USA N/A N/A
Argentina N/A N/A
Percentage of plants that are GFSI certified (%) 17% 23%
GCC 10% 20%
Egypt 100% 100%
Jordan 0% 0%
USA N/A N/A
Argentina N/A N/A
100 Almarai Sustainability Report 2019 Our sustainability performance 2018 2019 Number of food safety and quality assurance employees 659 561
GCC 585 487
Egypt 72 72
Jordan 2 2
USA N/A N/A
Argentina N/A N/A
Animal welfare
Number of cows 190,444 183,345
GCC 188,071 180,504
Egypt N/A N/A
Jordan 2,373 2,841
USA N/A N/A
Argentina N/A N/A
Number of chickens processed 157,372,110 191,103,518
GCC 157,372,110 191,103,518
Egypt N/A N/A
Jordan N/A N/A
USA N/A N/A
Argentina N/A N/A Number of incidents of non-compliance with laws and regulations, and adherence with 0 0 voluntary standards related to transportation, handling, and slaughter practices for live terrestrial and aquatic mammals GCC 0 0
Egypt N/A N/A
Jordan 0 0
USA N/A N/A
Argentina N/A N/A
Percentage of cows in enclosed housing with resting areas (%) 100% 100%
GCC 100% 100%
Egypt N/A N/A
Jordan 100% 100%
USA N/A N/A
Argentina N/A N/A
www.almarai.com 101 Appendices / GRI Content Index
Our sustainability performance 2018 2019 Percentage of chickens in enclosed cage free housing (%) 100% 100%
GCC 100% 100%
Egypt N/A N/A
Jordan N/A N/A
USA N/A N/A
Argentina N/A N/A
Ethical sourcing
Percentage of locally based suppliers engaged (%) 69% 68%
GCC 50% 51%
Egypt 81% 69%
Jordan 91% 97%
USA NIA 73%
Argentina 99% 99%
Percentage of spending on locally based suppliers (%)
GCC 45% 41%
Egypt 40% 69%
Jordan 57% 88%
USA NIA 85%
Argentina 98% 97%
Number of suppliers engaged 3,298 2,939
GCC 1,717 1,672
Egypt 588 111
Jordan 349 330
USA NIA 233
Argentina 644 593
Number of local suppliers engaged 2,292 2,007
GCC 858 854
Egypt 478 77
Jordan 319 320
USA NIA 171
Argentina 637 585
102 Almarai Sustainability Report 2019 Our sustainability performance 2018 2019 Percentage of purchased volume from suppliers compliant with company’s sourcing policy (%)
GCC NIA NIA
Egypt NIA 100%
Jordan 100% 100%
USA NIA 100%
Argentina NIA NIA Percentage of purchased volume which is verified as being in accordance with credible, internationally recognized responsible production standards (%) GCC NIA NIA
Egypt NIA 100%
Jordan NIA 40%
USA NIA 100%
Argentina NIA NIA
New suppliers that were screened using social and/or environmental criteria 0 48
GCC 0 0
Egypt 0 0
Jordan 0 3
USA NIA 45
Argentina NIA NIA Number of negative social and/or environmental impacts in the supply chain and NIA NIA actions taken GCC NIA NIA
Egypt NIA NIA
Jordan NIA NIA
USA NIA NIA
Argentina NIA NIA
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Almarai Company Exit 7, North Ring Road Al Izdihar District PO Box 8524 Riyadh, 11492 Saudi Arabia [email protected] www.almarai.com